The bright side of Bay Area economy

“If we’re talking about the Bay Area economy, we just have to acknowledge that that economy is extraordinarily strong and [has been] really unexpectedly strong over a very long period of time,” he said.

Weinberg rooted the region’s economic strength in its workforce and noted the challenges workers face in finding housing near their jobs, describing the region as the heart of the international innovation ecosystem. With an increasingly small number of innovation hubs across the globe, he acknowledged Bay Area jobs will continue to attract workers and demand for housing will continue to increase.

“If people really want economic opportunity, they really have to be here in the Bay Area,” he said. “That, really, I think increases the imperative to provide housing for them.”

Noting the Bay Area builds fewer units per new resident than other major metropolitan areas, Weinberg acknowledged the region’s housing production has been viewed as a limiting factor in businesses’ ability to attract and retain high-quality staff at all levels.

But he also looked to high home prices and other trends such as traffic congestion and parking scarcity as a function of the region’s economic success, noting the difficulty other regions have in attracting new businesses and providing job opportunities to their residents. In contrast to other economies with high home prices, Weinberg noted, the Bay Area’s growing homeless population is a different kind of problem, one that should be addressed in part through its economic success.

“When you look around the world, high housing prices are the hallmark of a strong economy,” he said. “On the other hand, homelessness is not.”

Weinberg counted the U.S. trade war with China and the lack of investment in capital expenditures following the corporate tax cuts among the region’s economic challenges.

By channeling funds into stock buy-backs, which he said have inflated the stock indices, companies have opted against capital expenditures, which Weinberg felt would support the region for a longer period of time. Though he acknowledged many Bay Area companies are on track to have their best year in revenue and profits, Weinberg noted the uncertainty caused by the country’s trade war with China will affect the number of imports and exports coming through the Port of Oakland.

Though Weinberg was hesitant to make predictions about the region’s economic future, he said the status of the region’s job market is one of the most basic indicators of what’s to come. Noting the difficulty a worker faces in entering the labor market from a period of unemployment, Weinberg was encouraged by the influx of workers into the job market.

“We’ve actually gotten back to the point in the economic cycle where more and more people are coming in off the sidelines,” he said. “That ends up having sort of a positive effect.”

Because many who attended Weinberg’s keynote have heard more negative predictions for the future, Anne LeClair, president of the San Mateo County/Silicon Valley Convention and Visitors Bureau, said his positivity in reviewing the region’s economic future was appreciated. She said those in the hospitality industry have observed a strong international visitors market in recent years and largely feel optimistic about occupancy rates in 2019, but noted no one has a crystal ball.

But she also acknowledged the region’s tight housing market and growing homeless population resonated as a concern for many who attended. Even with opportunities for workers in the hospitality industry to pursue education and advance in their careers, LeClair noted the region’s housing shortage is still on the minds of many.

“I think it’s those issues are a challenge for many people,” she said. “I am happy to say that in the hospitality industry, hotels in particular, a person can work his [or her] way up pretty quickly.”

anna@smdailyjournal.com

(650) 344-5200 ext. 106