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NORTHERN NEWS American Planning Association

A Publication of the Northern Section of the California Chapter of APA

Making Great Communities Happen

OCTOBER 2012

Beyond Boom-Bust-Boom By Michael Bills, Senior Planner, City of San José

I

n summer 2007, I penned a newsletter article for San José’s construction community that fondly recounted my experiences living in a transit-oriented development in North San José. In particular, I was optimistic about the future potential of the area, as the city had recently completed a major policy update — Vision North San José — to intensify land uses within the “Golden Triangle” and allow up to 27 million square feet of additional R&D/corporate office space and 32,000 housing units. Within months of the article’s release, the subprime mortgage lending issue came into better view, and one year later, we were engulfed by the global financial crisis and the worst recession since World War II. Not surprisingly, construction activity came to a screeching halt. In my 23-year career, I have witnessed several business cycle swings. But nothing has quite compared with the Great Recession. Whereas San José issued building permits for an average of nearly 2,500 multifamily housing units per year from 2003–2006, that collapsed to barely 1,000 units per year from 2007–2010. Then almost overnight, bust turned to boom, and right now San José is poised to set new permit activity records in calendar year 2012. (See Fig. 1)

Fig. 1. “Boom-Bust-Boom” Decade, 2003–2012

TAKING THE LONG VIEW Looking back and assessing the situation, I conclude that students and planners should be able to recognize, understand, and see beyond the inevitable boom-bust periods. At minimum, we need a basic education in economics and demographics to help keep us focused on the longer-term time horizons involved in our work. So, what can economics and demographics teach us about the wild “boom-bust-boom” rollercoaster ride we seem to encounter too often? For the sake of brevity and reader interest, I will focus exclusively on demographics, using a sampling of key research findings in recent analyses of Census 2010 and American Community Survey (ACS) data for the city of San José.

Population growth. The rate of population growth in San José has slowed in recent decades, from 37 percent in the 1970s to just 6 percent in the 2000s. Nonetheless, growth will inevitably continue for the foreseeable future. In fact, the very brief decline in population experienced in the aftermath of the Dot Com bust was, to the best of my knowledge, a first in the city’s history. More recently, in spite of the severity of the Great Recession, San José continued to grow at a healthy pace throughout that time. (See Fig. 2)

Fig. 2. Population Growth, 2000–2010

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Northern News, Oct 2012  

Urban planning news for northern california

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