Bay Area Council Blog

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New Report: UC Supports Immense, and Growing, Start-Up Culture

Entrepreneurial activity and innovation has been rapidly accelerating across the University of California in recent years, spurring a significant number of jobs, companies and economic activity for the state economy, according to a study released Aug. 17 by the Bay Area Council Economic Institute.

The study, which analyzed startup formation at each campus and across the UC system, found that university research has formed the basis for hundreds of new companies, employing tens of thousands of workers and adding $20 billion to the California economy.

Read Entrepreneurs, Startups and Innovation at the University of California>>

While UC’s role in seeding economic activity extends back many decades, the report found that the pace and number of new companies started by UC graduates and faculty has accelerated over the past 15 years.

Of the roughly 1,300 start-ups that have come out of UC since 1968, three-quarters were launched between 2000-2015.

UC-affiliated companies directly employ 38,056 workers and indirectly support 108,460 other jobs across a wide range of industries and incomes, from suppliers to restaurants.

– Those same companies generate total economic activity totaling $20.1 billion and contribute $503.8 million in federal tax revenue and another $88 million in state and local tax revenue.

– UC-affiliated start-ups also have been an important magnet for investment, attracting more than $16 billion in private venture funding since 1968 and hundreds of millions of dollars more in public grants.

The growth of economic activity spinning out of UC reflects a new level of entrepreneurial energy among students and faculty that is driving a broader cultural shift within the system, said Dr. Sean Randolph, lead report author and Senior Director of the Bay Area Council Economic Institute.

Traditional areas like academics and research remain a primary focus, but increasingly students and faculty are looking to apply that work and their knowledge in ways that solve real-world problems and translate directly into economic opportunity.

“The University of California and its 10 campuses are a dynamic and valuable force for the state’s economy,” Randolph said. “UC’s strategic work in harnessing the power of its emerging entrepreneurial culture is providing enormous benefits for the state economy and for the economies of the diverse regions where UC campuses are located.”

Those benefits come in the form of new companies, new jobs, new investment and new revenue for the state, the university and cities.

The report offers a conservative snapshot of what UC-affiliated start-ups and other entrepreneurial activities contribute to California’s economy. Of the total start-ups formed since 1968, the report analyzed the 603 that are headquartered in California and remain active today and the 447 of those for which public data is available.

The report also looked at the ways in which entrepreneurial activity is supported and promoted at both a system-wide level – through the University of California Office of the President – and through robust campus-based programs and initiatives.

One example cited by the report is the Innovation and Entrepreneur Initiative launched by current UC President Janet Napolitano in 2013 that aims to give scale and structure to the fast-emerging start-up culture.

Download the press release>>

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Council Urges Continued Talks on By-Right Housing Reforms

The Bay Area Council and Southern California Leadership Council, which are leading a statewide coalition of employers, affordable housing advocates, home builders and public policy groups in support of Gov. Jerry Brown’s by-right housing reforms, today (Aug. 12) issued the following statement urging continued negotiations on legislation to enact the Governor’s proposal. The bill would fast track approval of urban infill housing developments that meet affordability requirements and conform with all locally approved land use and zoning laws.

“California’s historic housing crisis won’t go away on its own, and it’s slamming the state’s door shut to future generations – sons, daughters, grandchildren – who can’t afford skyrocketing rents and home prices brought about by an epic shortage. In the final weeks of the current legislative session, we call on our legislative leaders to roll up their sleeves and negotiate with Governor Brown to craft workable, sensible reforms that speed the construction of all types of new housing statewide, especially affordable and urban infill housing that conforms with approved local land use and zoning laws. And we offer whatever assistance we can, including sitting down at the negotiating table, to help reach an agreement on this critical and forward-looking policy. 

“We can’t allow a few special interests that care more about preserving the status quo to undermine responsible and needed housing reforms aimed at helping millions of Californians — working families, seniors, young people, teachers and public servants, shop owners and workers, lower and middle class families with good jobs—who are being forced out, living in overcrowded conditions and battling grueling megacommutes. Californians who are spending up to 60 percent of their income on housing costs that are the main reason for the state’s nation-leading poverty rate.

“The problem could not be more clear. For decades, California has come up short in providing the housing that residents need. And while California has some of the strongest and most innovative land use and environmental protection laws in the world, those laws are too-often hijacked to keep out new residents and block new housing for reasons that have nothing to do with environmental protection. The results are equally clear: poverty, gentrification, displacement and growing commutes that threaten the state’s world-leading efforts to combat climate change.

“The state must act now to adopt reforms that will spur more housing and ensure that future generations have the same opportunity as those living here now to call California home.”

More than 2,200 Californians have signed the Council’s petition in support of the Governor’s by-right housing reform plan. Sign the petition>>

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Council Continues Push for Landmark Housing Reform

California’s epic housing crisis is hurting more than lower- and middle-income working families struggling to find housing they can afford. It’s also threatening to derail landmark greenhouse gas reduction laws that for a decade have made California a global leader in the battle against climate change, according to a white paper released this week (Aug. 9) by the Bay Area Council Economic Institute.

The report – Another Inconvenient Truth – finds that California is failing to meet key carbon reduction targets at the same time the state’s housing shortage is forcing more and more workers to endure longer and longer commutes. More than 100,000 Bay Area megacommuters travel 90 minutes or more every day to reach their jobs, contributing to a 78 percent increase since 1990 in the number of megacommuters crossing county and regional boundaries to get to work. Automobiles account for a significant portion of the state’s carbon emissions. Read Another Inconvenient Truth>>

The report comes as the Bay Area Council works with the Southern California Leadership Council and coalition of other partners statewide to press leaders in Sacramento to resume talks that broke down this week in Sacramento on a bill to enact reforms proposed by Gov. Jerry Brown that would fast track new urban infill housing. Read the Council’s statement>>

The Council this week also released a new video produced with the help of member company MSL Group that tells the painful story of the state’s housing crisis through the voices of several young workers who live in expensive, overcrowded conditions and doubt they will ever be able to afford a home. Watch the video>>

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Second Dwelling Unit Bill Clears Key Assembly Committee

Legislation (SB 1069) by Senator Bob Wieckowski that the Bay Area Council is sponsoring to ease restrictions on second dwelling units sailed through the Assembly Appropriations Committee this week on 15-3 vote, with two abstentions. The Council estimates that if just 10 percent of Bay Area homeowners added a second unit, the region would gain an estimate 150,000 new housing units.

The benefits of second units, also known as accessory dwelling units (ADUs), were highlighted in remarks today (Aug. 12) by Council Senior Vice President Matt Regan at the Innovative Approaches to Solving the Housing Crisis Forum hosted by Council member the Federal Reserve Bank of San Francisco’s. Regan explained how ADUs could provide naturally affordable and environmentally friendly housing for thousands of low and middle income renters, but that regulatory barriers such as parking requirements, discretionary permitting, and onerous fees prevent and discourage homeowners from adopting ADUs. SB 1069 would ease many of those obstacles. SB 1069 now moves the full Assembly for a vote. To engage in the Council’s housing policy work, please contact Senior Vice President Matt Regan at mregan@bayareacouncil.org.

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New Report: Housing Crisis Threatens CA Climate Change Goals

California’s epic housing crisis is hurting more than lower- and middle-income working families struggling to find housing they can afford. It’s also threatening to derail landmark greenhouse gas reduction laws that for a decade have made California a global leader in the battle against climate change, according to a white paper released today by the Bay Area Council Economic Institute.

The report – Another Inconvenient Truth – finds that a raft of regulatory and community barriers is blocking new urban infill housing near transit and job centers, forcing large and growing numbers of workers and others to commute longer and longer distances in exhaust-spewing automobiles. More than 100,000 Bay Area megacommuters travel 90 minutes or more every day to reach their jobs, contributing to a 78 percent increase since 1990 in the number of megacommuters crossing county and regional boundaries to get to work.

“The math is simple. Without more housing near urban centers and jobs, California can’t achieve its historic climate change goals,” said Micah Weinberg, President of the Bay Area Council Economic Institute. “Fortunately, the tools are available to change this equation if the political will exists to follow through on the state’s commitments. California has made great strides in addressing climate change and has shown tremendous resolve in doing the difficult things necessary to reduce carbon emissions. There’s no reason we can’t do the same thing with housing.”

The report offers 10 strategies for addressing the problem, including adopting a so-called “right to build” proposal by Gov. Jerry Brown that would fast track urban infill housing projects that include a percentage of units that are affordable for lower- and middle-income residents. The legislation has met with withering opposition from labor groups that see it as a threat to their ability to press home builders for higher wages.

With automobiles accounting for a significant portion of California’s overall greenhouse gas emissions, reducing commutes is one of the key strategies for meeting the state’s climate change goals. However, the report cites California Air Resources Board data that shows California failed to meet recent emissions reduction targets and is far off track in hitting ongoing annual targets needed to reach the state’s overall 2050 climate change goals.

To reduce commutes, metropolitan regions like the Bay Area were charged under state climate change policies with putting a majority of new housing in urban infill locations near transit and job centers known as priority development areas (PDAs). In the Bay Area, regional planners working with local communities identified 200 PDAs where 80 percent of the region’s new housing could be placed.

However, the Economic Institute report found that the Bay Area has come up well short of that goal, placing just 54 percent of new housing in PDAs. The problem is compounded by the fact that large metropolitan regions across the state like the Bay Area, including Los Angeles and San Diego, have failed over many decades to meet ongoing demand for new housing. In 2015, the Bay Area added 133,000 jobs but only 16,000 new housing units.

This ongoing shortage has pushed rents and home prices to the stratosphere – four of the Bay Area’s nine counties have registered median home prices above $1 million — and pushed a growing number of commuters to find less expensive housing further from their jobs in places like the Central Valley and Sacramento. Of the nearly 200,000 commuters crossing regional boundaries in 2013, the report found, 69 percent were commuting into the Bay Area for work. With higher housing costs taking a bigger and bigger bite out of household income, the state’s housing shortage also is cited as a primary driver of California’s nation-leading poverty rate.

There a number of key reasons that regions like the Bay Area haven’t kept pace with housing demand, according to the report, particularly for lower- and middle-income households. Myriad land use and zoning regulations drive up land costs, making almost any form of affordable housing infeasible without massive public subsidies. Local resistance to new housing is also a major factor, with opponents often abusing state environment laws to delay or stop projects. Onerous local fees on new housing can also add tens of thousands of dollars to each new housing unit.

The report identifies 10 strategies for addressing the problems, among them:

  • Adopting “right to build” legislation that fast tracks urban infill housing projects that include a guaranteed level of affordable units.
  • Giving cities incentives to meet their housing obligations.
  • Easing restrictions on creating second units.
  • Changing state fiscal policy to prioritize residential development.

Read the report: Another Inconvenient Truth>>

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Misguided Tech Jobs Tax Fails in San Francisco

A misguided proposal to tax San Francisco tech companies for creating jobs — a proposal we vigorously opposed — failed this week at the Board of Supervisors. The proposal called for levying an additional 1.5 percent tax on payroll expenses of many large tech employers. An analysis by the Bay Area Council Economic Institute that was provided to the Board’s Budget and Finance Committee estimated that the tax would chill tech hiring and result in the loss of almost 3,700 jobs, including tech jobs and a wide range of other jobs across incomes that they support.

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Bay Restoration Funding to Start Flowing in 2017

Fresh from the historic passage of Measure AA by voters this June, the San Francisco Baylands Steering Committee convened at the Bay Area Council on Tuesday (Aug. 2) to discuss next steps to improve the health and safety of the bay. Measure AA will raise $500 million over the next 20 years for wetland restoration, flood protection, pollution prevention, and public access projects along the bay shoreline. The Council, with the support of member companies like PG&E, was a lead group in passing the measure. The steering committee estimates grant funding for projects will be available in late 2017, and discussed strategies for obtaining state and federal matching dollars to make Measure AA funds go even further.

In the near-term, the committee is focused on encouraging Congress to pass the Water Resources and Development Act of 2016, and streamlining regulations to expedite wetland restoration. The Baylands Steering Committee was formed at the urging of Senator Dianne Feinstein to help identify and create a regional funding mechanism to restore bay wetlands and improve regional flood protection, and is comprised of leaders from the Bay Area Council, Resources Legacy Fund, Santa Clara Valley Water District, Save the Bay, and the Silicon Valley Leadership Group.

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Council Battles Stiff Opposition on Fast Track Housing Bill

It’s do or die time for legislation the Bay Area Council is championing to help combat California’s epic housing crisis. As legislators returned from summer recess this week, the Council stepped up its advocacy for a bill to spur new urban infill housing close to transit that is affordable for working Californians. The bill includes reforms proposed by Gov. Jerry Brown to remove a largely redundant and often time-consuming layer of local review, allowing cities to give simple administrative or “by right” approval of housing developments that meet all existing local planning, building and zoning regulations and that set aside either 20 percent of new homes for middle- and lower-income residents or 10 percent when the development is located close to transit.

The bill is facing stiff opposition from powerful state building trades unions that use the local housing approval process as a negotiating tool to force union contracts. The state’s historic housing shortage is the main reason for skyrocketing rents and home prices that consume up to 60 percent of household income for middle class and working families and give California the dubious distinction of having the nation’s highest poverty rate. The problem has become even more acute as the state adds more jobs than housing units. A report this week by a prominent global real estate services firm found that the Bay Area added five times more jobs in 2015 than housing units. Without enough housing in the Bay Area, a growing number of workers are commuting longer distances and undermining California’s efforts to reduce greenhouse gas emissions and meet the state’s aggressive climate change goals.

We need your help to keep the pressure on in Sacramento as the Legislature wraps its work in the next few weeks. Here’s what you can do:

Sign and share our online petition in support of “right to build” housing>>

Download our housing advocacy toolkit>>

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First-of-its-Kind Workplace Gender Equity Guide Unveiled

Advancing gender equity in the workplace, especially at the C-suite and Board level, continues to be a major challenge for employers nationwide. The good news is that addressing this challenge would have a tremendous economic payoff as fully implementing gender equity best practices would increase US GDP by 10 percent by 2025 according to McKinsey & Co. To address the systemic underrepresentation of women in the workplace, the Bay Area Council Economic Institute in partnership with Jennifer Siebel Newsom’s The Representation Project today unveiled a first-of-its-kind online strategy guide for businesses - Building Gender Equity in the Workplace – assessing the economics of gender equity and providing actionable practices for businesses to meet the challenge head on.

“We’ve made progress, but it has been too slow,” said Micah Weinberg, President of the Bay Area Council Economic Institute “Gender equality in the workplace is not just a moral and social imperative; it’s a fiscal necessity to a stronger, more competitive economy.”

At today’s launch event in San Francisco, Bay Area Council Gender Equity Committee Co-Chair Peg McAllister of Lee Hecht Harrison welcomed a packed house. Following a presentation of findings by Economic Institute President Micah Weinberg, The Representation Project Founder and CEO Jennifer Siebel Newsom delivered remarks on some of the underlying issues blocking women from advancing as leaders, including unconscious bias and socialization of gender stereotypes.

The cutting-edge practices and strategies included in the guide enable businesses to take a holistic approach in evaluating their hiring practices, evaluation policies, compensation transparency, career development programming, HR policies, leadership diversity and workplace culture needed to grow the talent pool and advance women professionally. Special thanks to project lead partner The Representation Project and regional sponsors San Francisco 49ers, Intel, San Francisco International Airport, Lawrence Berkeley National Lab, Lee Hecht Harrison, Deloitte, Wells Fargo, and Suffolk Construction.

Read Building Gender Equity in the Workplace>>

To get involved in the Council’s Gender Equity policy work, please contact Policy Manager Emily Loper.

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Council Advocacy on Near-Term Commute Relief Rewarded

The Bay Area Council’s advocacy for near-term commute relief was rewarded this week when the Metropolitan Transportation Commission approved $40 million for a suite of projects to expand transportation capacity in the critical Bay Bridge corridor linking the East Bay, San Francisco and Silicon Valley. Serving about a half million (and growing) commuters every weekday, the corridor is among the most congested in the Bay Area. The package includes funding to increase bus service, expand high-occupancy vehicle and bus-only lanes, and promote carpools. The Council was instrumental in securing $2.5 million as part of the package to enable the Water Emergency Transportation Authority to extend its increased summer service to year round.

In the face of rising gridlock on our highways and transit systems, the Council under the leadership of Transportation Committee Co-Chairs Rosemary Turner of UPS and Jeff Heller of Heller Manus has been working hard to implement near-term commute relief projects that will make the most efficient use of our current infrastructure and help ensure the future economic competitiveness of our region. To engage in the Council’s transportation policy work, please contact Senior Vice President Michael Cunningham.