Report Shows HSR Will Be Economic Boost to Central Valley

Feb 16th, 2015 | Posted by

Last week the California High Speed Rail Authority received an in-depth, 176-page report examining California High-Speed Rail and the Central Valley Economy. Assembled by Tony Oliveira and Parsons Brinckerhoff, the study shows that high speed rail will provide a major economic boost to the Central Valley – especially if it is built without delay.

The Fresno Bee’s Tim Sheehan provided a good summary of the study:

“Some stakeholders described the Central Valley as an ‘island’ that is isolated from the rest of California by geographic and economic barriers, and saw high-speed rail as a means to help break down those barriers,” Oliveira said.

Specifically, agriculture plays a disproportionate role in the Central Valley economy, which produces greater poverty and higher unemployment than in the rest of the state. The solution isn’t to destroy the agriculture industry, but to diversify the Valley’s economic base so that the entire region is not dependent on an industry that does not provide a good path to prosperity for its workers.

Agriculture represented about 15% of the Valley’s employment, and 10% of the region’s gross domestic product — far higher than the statewide proportions of 2.5% of jobs and 2% of GDP. In his report, Oliveira described the region’s lower income and lower educational attainment as a “chicken-and-egg scenario — an industry base that is focused primarily on farming and the public sector requires relatively lower levels of education.”

“This is one factor that discourages residents from pursuing higher levels of education and, subsequently, deters key knowledge industry employers from locating in the region due to a lack of qualified workers,” he added.

The study suggests that while agriculture is and will remain the backbone of the Valley economy, some community and economic leaders in the region believe high-speed rail could be a catalyst for improving the situation. “There is interest in seeing the rail authority collaborate with the region’s higher education institutions on a range of initiatives — job training, research, advancing applied sciences — which are the foundation for growing new business and employment opportunities.”

High speed rail would indeed help solve this crisis. It would open up the Valley’s more affordable homes to coastal workers – without necessarily fueling sprawl that would threaten farmland. It would make it easier for coastal businesses to relocate to the Central Valley, where land use costs are lower, without alienating themselves from their pool of employees. That all in turn generates some of the growth and incomes needed to support a knowledge economy in cities like Fresno and Bakersfield – on top of, rather than in place of, agriculture.

The whole report is worth reading closely – in part because it shows why the Central Valley is the right place to start this project, and why the Highway 99 corridor cities are right to be given stations on the route.

  1. synonymouse
    Feb 16th, 2015 at 10:24
    #1

    developerspeak

    Zorro Reply:

    Syno you are a Narrow Minded OLD fool.

    jimsf Reply:

    You can call it whatever you want. That doesn’t stop it from being true.

  2. trentbridge
    Feb 16th, 2015 at 10:33
    #2

    Any major project spending that improves transportation in an undeveloped area will bring an economic boom. It’s kinda the definition of undeveloped. Of course, the same argument is made for military bases or prisons to be constructed or maintained in such areas – even if the original purpose has diminished or disappeared. Not to say this report isn’t a “good thing” but I’m certain opponents could come up with hundreds of smaller projects that would also boost the local economy for the same amount of spending. Nice report but we’re building the high-speed rail for the whole of California – particularly the urban areas in SF and LA – and not to improve lives in the Central Valley alone. That’s a by-product.

    synonymouse Reply:

    The route is too circuitous to be competitive with air and auto.

    It’s sprawl – that’s all.

    adirondacker12800 Reply:

    the route is good enough to make flights between San Francisco and Los Angeles evaporate.

    synonymouse Reply:

    in your wildest dreams.

    adirondacker12800 Reply:

    Hundreds if not thousands of people who get paid to look at things like this disagree with your assertion. And there are similar railroads all over the world that manage to compete with air. Some of them so well that there isn’t any airline service anymore.

    Zorro Reply:

    Quite true adirondacker, but syno doesn’t care, He has a Closed Mind.

    synonymouse Reply:

    I assume they are getting paid by PB.

    J. Wong Reply:

    Saying that without any evidence is just hot air. I’ve asked you to put numbers behind your statementsbut you have declined to do so, which pretty much implies you (@syn) are talking out of your ass.

    Zorro Reply:

    Syno always does talk out of His ass, that’s where His brains are located at.

    synonymouse Reply:

    Zorro, there are things in this life I am unsure about.

    One definitely not is that JerryRail is such a piece of crappy planning that it will have no effect, zippo, nada, on LA-SF airline business.

    VBobier, is that you I detect out there?

    adirondacker12800 Reply:

    People on Planet Earth see it differently.

    Zorro Reply:

    Conservative Tool…

    joe Reply:

    Economic activity that pays good wages matter. The ag wage is very low. Gov jobs pay better.

    “wikiepdia”
    Jeffrey Michael, director of the Business Forecasting Center at the University of the Pacific, stated in an October 2010 newspaper interview that nearly half of Kings County’s personal earnings come from government jobs, which pay more than agricultural employment.

    Naval Air station and prisons. Just over 12% of the population are prisoners.

    adirondacker12800 Reply:

    ..who don’t vote but still get counted in the Census!

    Jerry Reply:

    “government jobs”?
    Does that include the jobs at the colleges and universities?

    joe Reply:

    Public education is government job but I don’t know of any large campus in Kings Co.
    No UC school. Merced is the newest CV campus. Can’t think of a CSU campus in Kings Co. either.

  3. Alon Levy
    Feb 16th, 2015 at 10:34
    #3

    If there is upzoning on the coasts, then the resulting price decrease will likely overwhelm any effect of HSR, except right next to the CV’s HSR stations. In Japan, there’s a lot of development next to outlying Shinkansen stations, but the net effect on the outlying prefectures as a whole is weak.

    Derek Reply:

    What price decrease?

    Alon Levy Reply:

    Upzoning -> more supply -> lower prices. This has been happening in Tokyo for the last 15-20 years.

    Derek Reply:

    Japan is losing population, so less population -> less demand -> lower prices.

    Joey Reply:

    Japan’s population loss is in rural areas and smaller cities. The larger ones like Tokyo are still growing.

    adirondacker12800 Reply:

    wikipedia says the population of the municipality of Toyko peaked in 1965. The formerly rural areas on the fringes have higher populations today than they did when they were rural.

    Eric Reply:

    Rich people have bigger houses, and income grows over time. So if no building occurs, a city will tend to decline in population. That is OK as long as the suburbs are sufficiently dense. Of course it would be better if the city built upwards as well.

    Miles Bader Reply:

    Tokyo is building a lot of high-rise housing in both the inner city and in the suburbs…. Even in the ‘burbs it’s popular because it means you can live fairly close to a rail station (plus views yadayada).

    [I have some friends that live in a condo that’s essentially in a major rail station…]

    adirondacker12800 Reply:

    If your grandparents got by with X square meters of space per person and you are living in an apartment with 3X square meters per person the building will be three times as tall….

    Miles Bader Reply:

    The current average size of a dwelling in Tokyo is around 64m^2 (and that’s more or less constant regardless of the age of the unit, at least for post-war dwellings; surviving pre-war dwellings tend to be a bit larger). The recent skyscraper (40-60 stories) dwellings around here tend to have units in the range of 70-80m^2.

    adirondacker12800 Reply:

    and if four people lived in it in 1963 and one or two people live in it now what does that do to the density of the neighborhood?

    Miles Bader Reply:

    The general effect of these skyscrapers (which are basically all very new, built in the last 10-20 years) has been to drastically increase the density of the neighborhood. They’re generally sized for families, and often represent an alternative to detached single-family housing in the farther reaches of the suburbs more than anything else.

    Eric Reply:

    But I assume that back in the day, you would have an extended family (parents, kids, a couple grandparents, maybe the odd aunt) all living in one apartment. Nowadays, the same apartment is more likely to hold two parents, one kid, and one dog.

    Miles Bader Reply:

    Extended families living together like that are not as common as they were several generations ago, but they’re still not at all uncommon (Japan isn’t the U.S. yet…).

    In any case it makes little difference to the question of whether such high-rises have increased density, because: (1) such buildings were quite rare until very recently, so the correct comparison is not the 1960s, but the 1990s, and living arrangements haven’t changed significantly since the 1990s, and (2) it wouldn’t even matter if the living-space-per-person doubled, when living-space-to-land-area increased by a factor of ten…. ><

    Alon Levy Reply:

    Actually, Tokyo (i.e. the 23 Special Wards, not the prefecture) overtook its 1965 population peak in 2010, and is now the largest it’s ever been, as per the same Wikipedia article. Follow the reference here.

    adirondacker12800 Reply:

    upzoning in Tokyo doesn’t explain prices in Osaka. Real estate has been in the doldrums all over Japan for a very long time.

    http://www.ibtimes.com/five-signs-japans-long-dead-real-estate-market-has-finally-come-back-life-1546719

    If you don’t like what WIkipedia says go edit it. Put in a citation for the blurb about people moving back into Tokyo.

    Elizabeth Alexis Reply:

    I would be very careful about using Japan as the model for anything.

    The real estate and population situation has many oddities and there are lots and lots of rules about FAR. The sheer volume of construction is less about new units and more about rebuilding torn down properties – the average building is torn down after only 30 years. There are some very specific reasons why very small, older rental apartments are now much more affordable.

    This is a country coming off a real estate bubble for the ages and decades into deflationary era.

    https://www.nri.com/global/opinion/papers/2008/pdf/np2008137.pdf

    Alon Levy Reply:

    California is coming off a real estate bubble, too!

    Elizabeth Alexis Reply:

    There was a great Freakonomics about this

    http://freakonomics.com/2014/02/26/why-are-japanese-homes-disposable-full-transcript/

    Do not compare housing starts in Japan to anywhere else if you are trying to understand changes in housing stock.

    Alon Levy Reply:

    First, I’m comparing growth in housing units and not housing starts (link). Some tightly zoned gentrifying American cities have 1:1 replacement of housing – for example, on Chicago’s North Side, it’s common to replace an old building with a new luxury building of similar area. Tokyo replaces buildings with larger buildings

    Second, Singapore, which did not have any such bubble, has the same mentality, in which a generation-old building is obsolete. The bubble is not tooooo relevant to the idea that old buildings aren’t great.

    Elizabeth Alexis Reply:

    I went and looked at the data – it is misleading because it looks at changes in population not households. Households are growing at about 2%/ year (this is much higher than population growth – function of aging society where youngsters are not pairing up)

    Within Tokyo, vacancy rates for habitable housing have not gone through the roof as you would need to sink rents. http://www.asres.net/AsRES_Papers/asres2014_submission_64.pdf

    Alon Levy Reply:

    But Tokyo vacancy rates are already very high by the standards of New York or Los Angeles!

    As for housing units, it’s significant that they’re not shrinking with the shrinkage of the average household.

    Elizabeth Alexis Reply:

    Yes – you are actually moving towards slightly more square footage per person. There are a couple of ways to look at this though.

    Jerry Reply:

    Upzoning won at the ballot box last November.
    http://www.spur.org/blog/2014-11-12/bay-area-voters-approve-smart-growth-reject-sprawl
    San Bruno will have taller building heights near its new CalTrain station.

    jimsf Reply:

    Alon that will never happen on the coast. The ‘haves’ are taking over the coast and are not interested in invited millions more to share it.

    joe Reply:

    There will be no upzoning to the degree needed. You complain about CA zoning at every opportunity. There’s no data to suggest any different with HSR – pop growth is most strong in the CV.

    Joey Reply:

    If the coastal areas are controlled by NIMBYs who want to keep their property values high and other demographics out, then development is going to go elsewhere.

    jimsf Reply:

    they are and it will.

    There is no amount of up zoning that would make the coast affordable to the average working family. But do let me know when they start selling homes for 175k over there.
    The following is a list of California locations by income.

    The per capita income of California in 2011 was $29,634, but just 17 of California’s counties had per capita incomes that were higher than this, indicating that places with high incomes per capita tend to be concentrated in counties with relatively high populations. Indeed, the average population of a county with a per capita income above that of the state was 888,534, and the average population of a county with a per capita income below that of the state was 533,271. The county with the highest per capita income was Marin County ($54,605), and the county with the lowest per capita income was Imperial County ($16,593). Of the ten highest-income counties by per capita income, all but Orange were in Northern California, and all but Orange were either in the San Francisco Bay Area or Greater Sacramento. Four had populations over 1,000,000. In contrast, none of the ten lowest-income counties in California had populations over 1,000,000, and all but Del Norte County were landlocked.

    Similarly, all but two of the highest-income places in California were in Northern California and the San Francisco bay area, except for two small Los Angeles County cities: Hidden Hills and Rolling Hills. Diablo had the highest per capita income of any place in California ($161,436). The ten lowest income places in California by per capita income were small, inland communities, none of which had a population of over 2,000.

    Joey Reply:

    Not everyone wants to move to Merced. And not everyone can.

    Eric Reply:

    “There is no amount of up zoning that would make the coast affordable to the average working family.”

    Incorrect. If there are no height limitations, then the price of a new apartment is the extra cost of building one more apartment.

    At the following link we see an estimate of $168/square foot for apartment building housing.
    http://www.rsmeans.com/models/apartment2/

    1000 square feet is enough for a family of 2 kids. So it is completely realistic for apartments to sell for $175k each.

    Alon Levy Reply:

    Nitpick: the marginal apartment is probably in a high-rise rather than a mid-rise, and then, construction costs are somewhat higher. More like $2,300 per m^2 than $1,800. Add in incidental charges like developer profits, and the 100 m^2 apartment for a family of four is more like $300,000, based on ratio of overall costs to construction costs for single-family houses, rather than $175,000.

    Mind you, $300,000 is affordable to the middle class, especially the Bay Area middle class, with its elevated wages. Median household income in the US is $55,000, but that includes smaller households. Working-class households may need to make moderate compromises on apartment size, on the order of 75 m^2 for a family of 4, to afford a market-rate apartment.

    joe Reply:

    1000 sq ft for a family with 2 kids?! 175K each? 175 per sq ft? The dormitory Derek found was $1000 / sq ft. $1,600 per month for under 300 sq ft.

    Get real guys.

    Eric Reply:

    Yep, that’s what zoning does. Increases rents by 500%. Literally. That’s why zoning should be abolished (except for smelly factories and things like that).

    Eric Reply:

    Also, college dorms tend to be ripoffs. My college dorm cost twice as much as a comparable apartment off campus, but I didn’t think twice, because the difference was insignificant compared to tuition… :(

    Donk Reply:

    Come on Eric, the real reason you didn’t think twice was because the dorms had a bunch of hot freshmen women living down the hall and the off-campus apartments didn’t.

    Alon Levy Reply:

    Oh, totally. At one WPI dorm, the rent per unit of floor area is higher than what I pay in Stockholm. That’s in famously expensive Worcester, Massachusetts. For comparison, my apartment in Providence, which is comparable to Worcester (and I lived in the expensive part of town), was a bit more expensive than my current one in Stockholm for three times the area.

    And the less said about how much uni cafeterias charge for terrible food, the better.

    joe Reply:

    WTF? So Derek’s low cost housing example was really a ploy to fool everyone with over priced dorms — but not you guys.

    Wake up. The Dorm is not university owned. It is private owned on private land and leased to a college as a dorm. This isn’t private college property. The builder is selling his private property for 7.4M which is 1,000 sq ft.

    Trickle down housing. The private sector is just waiting to make low cost units near highly desirable, land limited locations like SF if it were not for the mean old zoning monster. Why you could live in a painted lady victorian if we abolished zoning.

    Alon Levy Reply:

    Joe, stop saying “trickle down housing.” Shows you don’t understand trickle-down economics enough to be able to pinpoint what’s wrong with it.

    Zorro Reply:

    Alon Levy I hope you know that ‘trickle-down economics’ is a fraud created by the traitor President Reagan who was suffering from Alzheimers, but that’s what you get when you elect an Actor to office…

    Former President Ronald Reagan got away with violating the embargo with Iran in the Iran/Contra affair and was not impeached or convicted and removed from office, though He should have been, He’s right up there with Benedict Arnold.

    joe Reply:

    This is exactly what you guys want: “trickle down housing.”

    Eliminate all zoning restrictions on developers so the free market can build housing. Units will tickle down to the middle and lower class.

    It’s the same bullshit.

    synonymouse Reply:

    I’d put Ronald Reagan in the category of among the worst presidents, but “traitor” is unwarranted. Foggy Bottom has a soft spot for Iran – fascist dictators have always been popular with the State Dep’t. See Franco, Pinochet, the Ayatollahs.

    I suspect Jimmy Carter was privately somewhat sympathetic to the idea of replacing the Shah with a more democratic government and wanted to broker some kind of modus vivendi with the Iranian revolutionaries. He did not grasp at first that he was dealing with religious and reactionary fanatics not leftists. But hey Barack has probably not realized even now that the Arab Spring was the Allah Spring. He is as much Bullshitter in Chief as Ronnie.

    It all comes down to whether you think the religion in question can be reformed or modernized. I don’t think so. Look at the Maghreb – a disaster, better off under European rule, with all its faults.

    adirondacker12800 Reply:

    They directly contravened the explicit instructions of Congress. But IOKIYAR.

    Most terrorists are nominally Christian, you probably don’t want to examine the terrorist’s religion too closely.

    synonymouse Reply:

    Well not long ago the Vatican broached the scheme of a deal with the Middle Eastern clerics to set up dual theocracies, each with their own stomping ground.

    But who else is working up a “Caliphate”?

    adirondacker12800 Reply:

    You realllly have to take the stuff the John Birch Society publishes with a grain of salt. About the size of a Toyota.

    Alon Levy Reply:

    Alon Levy I hope you know that ‘trickle-down economics’ is a fraud

    …yes. But I can actually explain what the theory is, and why it’s a fraud, and how it relates to the separate fraud of the Laffer curve, and in particular why it has nothing to do with the theory (and the fact) that building more housing reduces rents.

    Briefly: the Laffer curve is a claim that when taxes are very high, they reduce the incentive to work so much that cutting taxes could generate more revenue. This is true, at very high tax rates; the empirical studies I’ve seen claim that peak revenue occurs at tax rates on the order of 70% or 80%. Laffer claims the peak is closer to 25-33%, and that’s bullshit.

    Trickle down economics is a related claim that cutting taxes on high incomes has a multiplier effect that puts money in the pockets of poor people (whereas supply-side economics/the Laffer curve is the claim that cutting taxes on high incomes gives the government more money). This is again true – giving rich people more yachts will create jobs for shipbuilders and yacht crew. But in terms of actually creating jobs and raising the incomes of poor people, it’s more efficient to just give the money to poor people directly, through social spending or cuts in taxes on low incomes. The trickle-down claim is that giving rich people more money makes the economy so much more efficient that it creates jobs for poor people better than just giving poor people more money, and like Laffer’s claim of a 33% peak, it’s nuts.

    Both of these claims involve Keynesian multipliers, which just shows how much the people making those claims are hacks, since they also opposed the stimulus. Empirically, if the government cuts taxes by $1, or raises spending by $1, then it grows the economy by more than $1 – more like $1.25 or $1.50. The government will be able to capture some of that extra growth in taxes, so the deficit will increase by less than $1. The Laffer curve claim is that the multiplier of high-income tax cuts is in the 3 or 4 area ($1 in tax cuts -> $3 or $4 in economic output), which is total crap. The trickle down claim is that the multiplier of high-income tax cuts is much higher than that of social spending or low-income tax cuts – let’s say again 3 or 4 vs. 1.5 for government spending – and that again is pulled straight out of people’s asses.

    What Joe and others, and I think even Robert, call trickle-down rent is completely different. The claim I and others make is that allowing more construction will reduce rent through supply and demand, and in particular it can reduce rent to the point that working-class (but not poor) families can afford reasonable apartments without subsidies or rent controls. This is not a claim about making the economy more efficient, or about multipliers. It’s also a claim with way more empirical grounding than Laffer’s magical 30% tax revenue maximum. Quibble about Tokyo all you’d like, but the idea that it’s had a housing boom and declining rents passes a sanity check. Laffer’s magical 30% tax revenue maximum doesn’t.

    joe Reply:

    My college dorm cost twice as much as a comparable apartment off campus,

    Off campus. Why would on campus housing cost more than off campus? Hmmmm…

    Eric Reply:

    In this case, “on campus” was one block away from “off campus”, so the objection doesn’t really apply. Sorry I wasn’t clear.

    Alon Levy Reply:

    My cheap Providence apartment was very close to campus as well, and was actually better-located than on-campus housing for proximity to the supermarket and to two of the East Side’s commercial drags (to the extent Brown has a well-defined campus, it’s the third East Side commercial drag).

    joe Reply:

    And who cleans the lower cost apt bathroom? Are meal tickets are the same price on and off campus?
    In al my experiences Dorms are cleaned, meal tickets discounted. other added value such as utilities and simply responsibilities – so the apples cost more than oranges.

    In this case the facts are clear: This SF College dormitory is a private bld, not university owned. The price for the dormitory is 7.4M or $1000 sq ft. It is leased as a dormitory. The price per sq ft is for the property lease to the Univ, not the students.

    Maybe you guys can find off campus housing cheaper than the Dormitory rather than make excuses. Find the College of Arts and see what rents are.

    Alon Levy Reply:

    The dorm suites I’m thinking about are apartment-style (with like 3 bedrooms and 2 people per bedroom), so I don’t think bathroom cleaning is included. And even if it is, it’s far cheaper than the extra rent. It’s like getting free drinks at a casino.

    Meal plans are overpriced, too – compare them with off-campus food’s price and quality.

    Also, lol at “rather than make excuses”; we’re the ones talking about how there is cheaper off-campus housing and dorms are overpriced, you’re the one trying to explain to us why occasional bathroom cleaning is totally worth paying $700 a month in rent for one sixth of a three-bedroom suite.

    Reedman Reply:

    At 97 Orchard Street in Manhattan, part of the present-day Tenement Museum: a five story building (plus a basement) built about 1864. Each floor had four, three-room apartments (two apartments per floor facing front, two facing back, 20 apartments total using a single staircase), each apartment was 325 square feet. It wasn’t unusual for an apartment to house seven people. When built, apartments had no water, no toilets (privies in the back yard), no showers, a coal/wood fireplace per unit for cooking and heat.

    Alon Levy Reply:

    Yes, I do in fact complain. But whereas you complain that SF shouldn’t upzone because views, or something, Robert has repeatedly come out in favor of coastal upzoning.

    joe Reply:

    Nice job mocking zoning regs that control bld height. It shows how selfish you can be demanding places destroy character so you have have cheap rental units.

    adirondacker12800 Reply:

    It’s hard to build cheap rental units in elevator buildings.

    Eric Reply:

    Cheap by Fresno standards? No. Cheap by SF standards? Absolutely.

    Joey Reply:

    Not everyone equates a lack of density with character.

    jimsf Reply:

    developers have no interest in building cheaper housing regardless of how much leeway they are given because they make more money selling high end housing. And california, especially the bay area, has so many people who can afford high end housing that real estate prices do not need to decline in order to attract buyers. If you let the developers build 100, 80 story condo towers in sf, all 100 of them would still be million dollar condos and all 100 of them would sell out at million dollar prices.

    Derek Reply:

    developers have no interest in building cheaper housing

    False.

    joe Reply:

    Hamburger hamburger

    Over $300,000 for under 300 square feet.

    Why that’s a steal at just over $1000 square foot.

    jimsf Reply:

    are you joking? And they expect two people to share these?

    I mean if this is college dorm housing I can see it but we are talking about real housing for working families. Even these tiny units cost over 300k each – per total building price, which would make them even higher if they were being sold as studio condos.

    And studios condos aren’t good for anyone except high paid singles and executives who need a landing pad.

    Ridiculous.

    jimsf Reply:

    I looked at the pics. where do the two roommates sleep? on the kitchen floor?

    joe Reply:

    It is a dormitory, not a condo complex. The property is leased to a College as a dormitory. The owner is selling for 7.4M if anyone is interested in owning a dorm.

    Joey Reply:

    Developers will always cater to the rich. That’s acceptable. It’s better that rich people are moving into new units rather than displacing people from existing ones.

    Robert Cruickshank Reply:

    I very strongly support coastal upzoning. However, it will not produce *lower* prices. It just slows the rate of increase.

    Even with no limits on height and density in the coastal metropolises, the Central Valley will still be more affordable than the coasts, and HSR will make that accessible, producing a boom in population and business relocation.

    jimsf Reply:

    exactly. and the central valley cities can begin to offer some higher densities in certain districts along with better cultural scenes as some people opt for an urban experience at a quarter the price and avoid putting up with all the new douchebags in the bay area.

    Joey Reply:

    It just slows the rate of increase.

    And that is a desirable goal.

    Even with no limits on height and density in the coastal metropolises, the Central Valley will still be more affordable than the coasts

    And that’s fine, but that doesn’t mean that steps shouldn’t be taken to make the coastal areas more affordable.

    john burrows Reply:

    A possible example—

    According to Zillow the current median selling price for homes sold in San Jose is $658,000 compared to $189,000 in Fresno, up about 10% over last year in both cities.

    The median rent is $2,625 per month in San Jose, $725 in Fresno.

    There is no telling what the real estate and job markets will look like when Bay to Basin becomes a reality. We don’t know what the ticket price will be or what kind of a discount or subsidy a commuter might get, and for each potential commuter there will be the issue of getting to and from the train But with trains making the trip in less than one hour I would not rule out an unexpectedly large number of commuters, particularly commuters making less than five round trips per week.

    A few years ago my wife commuted from Burlingame to Santa Clara by Caltrain where she met a Kaiser van which then took her to work at the hospital. Also on the van were two RNs who would board the ACE train at Tracy and then catch up on their sleep on the trip to Santa Clara.

    Apple’s new campus, for instance, is right next door to Kaiser Hospital and is it too much of a stretch to imagine that a number of Apple’s 16,000 employees might decide to take advantage of cheap home prices in Fresno, take the train to San Jose, and then board the Apple mega buses?

    joe Reply:

    An hour commute is nothing. Fresno at 1:20 to RWC (stops GLY and SJC) would be a trip with ~1 hr of pseudo-productive time on the train.

    My Gilroy home is ~ 15 min walk to the HSR station downtown. I expect this town will infill to 3 story blds near the station which seem to be typical for what is built low cost and within code. Other areas are expanding with dense, middle-class single-family units on postage stamp lots.

    Drunk Engineer Reply:

    According to Zillow the current median selling price for homes sold in San Jose is $658,000 compared to $189,000 in Fresno, up about 10% over last year in both cities.

    Moving all the way to Fresno would be pretty idiotic when there are still quite a few cities in the Bay Area with BART service where $189k is enough to buy a house.

    And when pricing Fresno real estate, don’t forget to account for cooling bills (several hundred per month).

    joe Reply:

    Where can people buy a BART home for 189K and use BART to get to a SV job?

    Oh yes, Fresno cooling bills will be higher …because you’ll own a much larger home in Fresno.
    What about the general cost of living?

    Neil Shea Reply:

    A livable $189k home near BART? I don’t believe it …Examples please…

    $250k in Fresno gets a comfortable home with a yard, what costs more than $700k in many parts of the Bay Area.

    Comparing the huge difference in rent, a primary breadwinner working a Bay Area job could easily budget $1000/month for commuting, which is ~$50 per workday, more if it is sufficient to work 1-2 days per week from home (or if large employers create satellite work locations in Fresno). This may be realistic for many people — and this pricing may be supported on multi-ride tickets or tickets bought well in advance.

    Drunk Engineer Reply:

    Here ya go:
    http://www.c21mm.co/Real_Estate/CA/OAKLAND/1473_71st_Avenue/218-10-81448774/

    $150k for a 2-bed house with off-street parking, and 1-mile away from a BART station.

    If you want other examples, then zillow it yourself.

    Jerry Reply:

    There were quite a few condos with 2 BR/2 BA not far from BART also.

    john burrows Reply:

    The living area is 684 sq ft—pretty small for 2 bedrooms.

    Drunk Engineer Reply:

    Sq ft numbers are not that reliable for pre-war buildings. This one has a “bonus room” which is realtor-speak for not-included-in-sq-footage number.

    joe Reply:

    It’s probably done without permits and why the property dropped from 177k to 150k.

    Neil Shea Reply:

    Meanwhile in Fresno for $299k (Zestimate only $241k) you can get a 5 BR / 4 BA 3000 sq ft house with a large yard on a quiet tree lined street less than a mile from downtown & the HSR station

    http://www.zillow.com/homes/for_sale/fsba,fsbo,new_lt/18754562_zpid/3-_beds/0-300000_price/0-1111_mp/days_sort/36.764501,-119.733682,36.718419,-119.822688_rect/13_zm/0_mmm/?view=map

    Or a 4 BR / 4 BA 2125 sq ft house for $120k slightly closer to the station

    http://www.zillow.com/homes/for_sale/fsba,fsbo,new_lt/82867093_zpid/3-_beds/0-300000_price/0-1111_mp/days_sort/36.764501,-119.733639,36.718419,-119.822645_rect/13_zm/0_mmm/?view=map

    The commute from a Fresno house to a high paying Silicon Valley job is not that much further than a commute via BART or 880 from a small condo in a dangerous part of Oakland — and is a third to a fifth of the cost of a home with a yard in Silicon Valley.

    Eric Reply:

    But HSR from Fresno to SF would be expensive. Let’s say $40 one way as opposed to $10 one way with BART. Add that up over a 40 year career of work days, and you’ve paid an extra $500k on travel expenses. Sort of defeats the point of saving a couple hundred thousand on real estate.

    swing hanger Reply:

    Real world example: Mishima-Tokyo (a long-distance commute) on the Tokaido Shinkansen, JR Central sells one month passes for 92,220 yen. Buying individual tickets for the 23 work days in a hypothetical 31 day month with 4 weekends comes out to 184,000 yen (4000 yen one way). These passes can also be used on conventional trains on the same routing, and of course can be used on weekends for trips to the city for shopping entertainment, etc.

    Neil Shea Reply:

    @Eric — I think the comparison is between a ~$200k large home with yard in Fresno vs. ~650k+ for something similar in average parts of the Bay Area. And the Bay Area homes still have a commute with the associated cost ($10 each way in your example) and time (generally 30+ minutes). In the Bay Area people must often choose a condo, which still costs more than the house with yard in Fresno.

    So other factors will determine families’ preferences such as:
    – importance of a single family home with yard vs. condo
    – Spouse work situation
    – Where can grandparents retire comfortably
    – How many days per month must the employee work from the office (e.g. 2-3 days/week for many jobs)
    – What discounts on monthly passes will HSR offer (BART obviously does not)
    – How many employers create satellite work locations in Fresno with some staff at both offices regularly working from the other office to facilitate collaboration

    And of course few people make static plans for a 40 year career. If parents with 3 kids can give each kid a bedroom with a yard to play in for 10 years, and be at their silicon valley office 3 days a week, that could make sense for a lot of families. And a Fresno home reachable to the HSR station (via bus, bike, spouse dropoff) may well appreciate nicely compared to the much more expensive Bay Area home.

    datacruncher Reply:

    About 14 years ago developers worked with Caltrans, Nortel, and others to plan housing in Madera County north of Fresno (across the San Joaquin River) specifically geared to telecommuters.
    http://www.marketwatch.com/story/e-villages-target-telecommuters

    The original developer ran into several problems and the project did not meet its timelines.

    But new developers have now received approvals for large projects in the same Madera County area.
    http://www.marketwired.com/press-release/The-McCaffrey-Group-Receives-Approval-to-Build-Tesoro-Viejo-Master-Planned-Community-1967860.htm
    Photos of the area slated for development:
    http://www.fresnobee.com/2014/09/25/4144395/mccaffreys-5200-home-tesoro-viejo.html

    With HSR access from Fresno, I could see the new developers targeting the same market of telecommuters who might only need to physically visit the office in the Bay Area or Southern California 1 or 2 days per week.

    Jerry Reply:

    @datacruncher
    interesting developing project near Madera. Getting from the development to the nearest HSR station is another matter.
    Similar type developments in the Morgan Hill to Hollister area based upon TOD designs would help also.

    datacruncher Reply:

    That development area is about 15 to 20 miles from the downtown Fresno HSR station. Of course for 1 or 2 days per week someone might drive to the station, or they could use an alternative like Uber/Lyft both of which operate in the area.

    But Fresno is also starting a new transit line this spring that will operate from downtown Fresno to Yosemite National Park. That line will follow Highway 41 right thru the middle of this development area which adds another option.

    J. Wong Reply:

    “[O]r what kind of a discount or subsidy a commuter might get”

    @synonymouse would beg to differ, but there will be no subsidy. It won’t be cheap to commute to either the Bay Area or the L.A. basin even with a discount for multiple trips (if any).

    Edward Reply:

    State law now requires cities and counties to build housing units. The amounts are here:
    http://www.abag.ca.gov/planning/housingneeds/pdfs/Final%20RHNA%20(2014-2022).pdf

    And the anti-nimby statute is here. Prepare for a long read:
    http://www.leginfo.ca.gov/cgi-bin/displaycode?section=gov&group=65001-66000&file=65580-65589.8

    Edward Reply:

    These are the requirements for the Bay Area. The rest of the state has the same requirements but are not handles by ABAG but by their local agencies or the county directly.

    Edward Reply:

    If a city or county does not meet its quota by 2022 it is required to upzone so that it will meet quotas in the future.

    Sheesh, I am commenting on my comments just like synonymouse. I need to organize my thoughts a bit better.

    joe Reply:

    But it is not enough.

    Menlo Park had to add just shy of 2000 units for years of non compliance. MtView is better at it but not even close to matching development and job growth.

    adirondacker12800 Reply:

    And everybody is going to follow the law of course.

    http://en.wikipedia.org/wiki/Mount_Laurel_doctrine

    Edward Reply:

    Mount Laurel was a judicial decision. In California it is a statute passed by the legislature. ABAG has only one power to enforce its decisions. It hands out the federal and state money to cities and counties. It need no other power.

    adirondacker12800 Reply:

    Why is Menlo Park so far behind in it’s allocation?

    joe Reply:

    It’s not a criminal violation.

    The Facebook campus would not be approved until MP complied.

    I believe there are other more recent powers given to a regional governmental org that allow them to withhold a fraction of road funding until cities comply.

    J. Wong Reply:

    Surprisingly, San Francisco is making a real effort at building out their housing stock. Of course, they should’ve been doing it years ago, but oh well, better late than never. And of course, people are resisting it for various reasons.

    Eric Reply:

    No they’re not. They’re building density in a few mostly dilapidated neighborhoods near downtown. Meanwhile, vast swathes of single family houses are untouchable.

    J. Wong Reply:

    It’s true, they’re not going to tear down single family properties and replace them with multi-unit properties, but there is sufficient empty land in San Francisco to make building more dense housing possible. And it isn’t all near downtown. Pier 70, 16th & Mission, Balboa Reservoir, Hunter’s Point all will add significantly to the cities housing stock. And if they redevelop Park Merced, even more.

    (One pie-in-the-sky proposal for Balboa Reservoir was for 6000 units in 50-story narrow towers. Probably not going to happen, but more likely it will be more housing than a minimal 800 units also proposed.)

    synonymouse Reply:

    Of course they are planning to demo existing low density housing and replace them high-rise tenements with just enough air to last the nite.

    That’s what “BT” on Geary and 19th Ave. is all about. And undermining Muni. So they can sell off Presidio Yard.

    At least the Cheerleaders should have the moxie to go all the way Jettsons and demand driverless.

  4. datacruncher
    Feb 16th, 2015 at 12:37
    #4

    Report co-author Tony Oliveira served on the Kings County Board of Supervisors from January 1999 until December 2011.
    http://www.oliveiraadvisory.com/bio.html
    https://www.linkedin.com/pub/tony-oliveira/48/113/122

  5. datacruncher
    Feb 16th, 2015 at 12:38
    #5

    Hanford Sentinel newspaper editorial published Saturday.

    Our view – County’s HSR decision lacks sense

    The official stand in Kings County is, “No high-speed rail!!!”

    We get it. The California Rail Authority gets it. No one expects a sudden change of heart among Kings County officials.

    That’s why the Kings County Board of Supervisors’ unanimous decision this week on high-speed rail is difficult to understand. It’s short-sighted and does not serve constituents.

    Supervisors voted against starting discussions with the California High-speed Rail Authority about how businesses would get financial help if forced to move by the railway.

    ………………………..

    Not long ago, the Hanford City Council took steps to ensure the state would have to pay for improvements in the area of a proposed station. Those steps were not an endorsement of high-speed rail, but they were an effort to ameliorate the financial effect on local people.

    The supervisors’ decision sounds more like a schoolyard spat than a thoughtful decision. We don’t like your game, so we are going to pretend you don’t exist, even if it hurts us.

    The train is on a roll; whether it can be derailed or not remains to be decided. But in the meantime, Kings County officials should take every means possible to ensure local people and businesses are harmed as little as possible if the train should be built.

    That’s not an endorsement of high-speed rail; it’s common sense.

    http://hanfordsentinel.com/news/opinion/columnns/county-s-hsr-decision-lacks-sense/article_14af67cf-ad62-58a8-8cfb-82ac20088b5d.html

    trentbridge Reply:

    “We don’t like your game, so we are going to pretend you don’t exist, even if it hurts us.”

    Wow! Where’s a copyright lawyer when you need one..

    Stolen directly from the 2008 GOP guide for politicians dealing with an African-American elected as President.

  6. Robert S. Allen
    Feb 16th, 2015 at 23:56
    #6

    Title of 2008 Prop 1A: “Safe, Reliable…” HSR. To be safe and reliable, HSR must be fenced and grade separated. Otherwise it is vulnerable to accident, suicide, vandalism, and resultant train delays. Grade crossings and mid-town commute stations make Caltrain track unsuitable for HSR.

    J. Wong Reply:

    You know, just fencing and grade separating won’t guarantee invulnerability to accident, suicide, vandalism or resultant train delays. Thieves stole copper cable from BART and it is fenced and grade separated.

    Alon Levy Reply:

    The ultimate safety is of course provided by airline security theater, of the kind that the US had on 9/11.

    /troll

  7. Useless
    Feb 17th, 2015 at 06:50
    #7

    Turns out Chinese have no cost advantage over Europeans after all.

    India has also found that the cost China pays at home for its rail systems does not apply abroad.

    A Chinese feasibility study of a high speed rail project in southern India proposed a budget rivaling European costs, says Michel Testard, an advisor to the French rail operator SNCF, which works in tandem with Alstom. “The Chinese are not so low cost as we thought,” he adds. “Prices vary a lot depending on the conditions.”

    http://www.csmonitor.com/World/Asia-Pacific/2015/0217/China-s-high-speed-rail-All-dressed-up-with-no-place-to-sell

    synonymouse Reply:

    And that is why MTC did not buy its steel in China.

    Eric Reply:

    “says Michel Testard, an advisor to the French rail operator SNCF, which works in tandem with Alstom”

    Not saying it’s necessarily wrong, but this is about the opposite of an unbiased source.

Comments are closed.