For its small size, Foster City has a strong percentage of high-earning households and large employers but, as part of a recent real estate analysis, city leaders hope they can bolster and diversify its economic base.
The city’s recent market report noted its unique position as a relatively affluent and highly-educated population, with average household income at about $250,000 and around 77% of residents holding a bachelor’s degree or higher — among the highest in the county. With large employers like Gilead and Zoox, the city also supports about 20,000 high-earning jobs, with its jobs-to-housing ratio indicating that more people commute into the city for work than live there.
“You still have a net positive inflow of people coming into the city to work every day,” Kosmont Companies President Ken Hira said to the council during a meeting April 21.
Hira noted other non-residential sectors that could improve, such as retail. Between a 17% retail vacancy rate and the lack of an identifiable downtown district, many residents tend to flock to nearby cities, like San Mateo, for shopping needs, Hira said, adding that the increasing percentage of online shoppers has also hurt the industry.
“You have a 600,000-square-foot retail footprint and pretty high rents. The downtown core as a concept for the city is not something that is readily identifiable,” Hira said. “There are hundreds of thousands of square feet that would have been the equivalent of a brick-and-mortar shopping center in the good old days, where that money is being spent more or less online.”
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The restaurant industry also faces its own challenges, as labor and food costs also drive up costs in a notoriously margin-sensitive industry. Office vacancies have remained stubbornly high, climbing to around 15% at the end of 2025, though it has started to improve since the beginning of the year, he added.
The analysis is part of a broader initiative to identify more economic boosters throughout the city. It recently projected an unexpected budget surplus for the current fiscal year, which ends in June, but it’s still facing financial challenges, as a decline in hotel tax revenue, unfunded pension payments and transfers to capital improvement projects will give the city’s general fund few net gains and raise concerns about its future fiscal position.
The transient occupancy tax, or hotel tax, is running about 7% below last year's pace, which the city plans to start auditing more heavily.
“When I think about economic development, it's also about how do we retain the businesses we already have here that are doing well but could be doing much better, and what are the policies we have that, maybe not on purpose, are blocking them from doing better?” Councilmember Phoebe Venkat said during the meeting.
The real estate market discussion will also come back before the council this summer and focus more specifically on certain sites that could be further developed.
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