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Will High Speed Rail Turn The Central Valley Into A Bay Area Bedroom Community?

May 24, 2016

Supporters of California’s ambitious High-Speed rail project are making a lot of big promises about what the line can achieve, everything from less greenhouse gas emissions to fewer cars on the road. One of the most far-reaching claims is the potential to revolutionize towns where there will be stations like Fresno and Merced.

For more on the topic we spoke with a few experts this week on Valley Edition. Joining the conversation are Elizabeth Jonasson with the California High Speed Rail Authority and Lee Ann Eager with the Fresno County Economic Development Corporation. To hear the story and discussion click play above. 

Home prices and rent in the Bay Area have soared making the area one of the most expensive places in the country to live. high-speed rail advocates think the central valley could provide a home for workers displaced by unaffordable housing.

"Try to be a teacher, or a police officer, or a firefighter, or somebody who works in retail or a restaurant. It is neigh impossible to live anywhere near the job," Carl Guardino, SVLG

“We are going to be able to shrink the globe quite literally by linking Fresno and San Jose,” says Carl Guardino is the CEO of the Silicon Valley Leadership Group.

The SVLG is a collection of tech companies that advocate on issues such as transportation, and in this case, are strongly in favor of the bullet train.

In his view, the train is going to provide relief for a Bay Area housing market that has spiraled out of control and help thousands of middle-income workers find a home in the central valley.

“Try to be a teacher, or a police officer, or a firefighter, or somebody who works in retail or a restaurant. It is neigh impossible to live anywhere near the jobs we are producing in abundance here,” Guardino says.

The median home price in San Jose, according to industry research, is four times that of the rest of the country reaching nearly $900,000. Prices have doubled since 2000. Making the region one of the most expensive places to live in the country.

Credit High Speed Rail Authority

As Silicon Valley took off, many middle-class workers fled to the north valley transforming once tiny farming communities, like Los Banos, into sprawling bedroom communities with more affordable housing. The median home price there is less than $250,000.

The result is thousands of people are now commuting very long distances to find work, sometimes two hours or more.

Guardino sees them trading in their daily car commute for a predictable hour on the train in exchange for cheaper housing in the central valley.

University of the Pacific researcher Jeffrey Michael says about more than half of all workers in Los Banos commute, and of that about a 40% are commuting over the hill into the bay…a commute that for most takes more than 90 minutes each way.

However, Michael is highly skeptical of Guardino’s prediction that thousands will be making the commute every day from one valley to the other and back.

“Unless there was a huge revolution in their plans for financing it. I don’t see the ability to subsidize it enough to make it cost effective for daily commuting,” Michael says.

Riding the rail won’t be cheap.

Doing rough math based on fare tables released by the High-Speed Rail Authority, it would cost north of $2,000 a month to commute on the train each way five days a week.

Guardino counters that package rates would likely bring that cost down. Also, that simply looking at the dollar figure ignores the lost hours, wear and tear on cars and non-economic cost like missing family-time that mega-commuters are currently paying.

"I think we actually see jobs imported from the Silicon Valley to Fresno," Mayor Ashley Swearengin

However, not even all high-speed rail supporters agree with Guardino’s including Fresno Mayor Ashley Swearengin.

She thinks companies will move some operations to Fresno so CEO’s can easily pop in and out or have workers commute less frequently rather than a large influx and outflow of daily commuters.

“I think that is unrealistic. I don’t think we are looking at ‘I live in Fresno but I go to work every day in the Silicon Valley’.  I think we actually see jobs imported from the Silicon Valley to Fresno,” Swearengin says.

The High-Speed Rail Authority seems to be somewhere in between Mayor Swearengin and Mr. Guardino.

Authority Vice-chair Tom Richards somewhat skeptical scale of the commuters but acknowledges many people are already making long commutes in search of lower home prices and that some may be willing to call Fresno or Merced home.

“There certainly is somebody of information that would suggest that the housing market in the central valley could provide some relief for the difficult of buying houses in the Silicon Valley and the Bay Area,” Richards says.

There is a big financial reason why people could consider the high-speed rail to be a better option than the drive.

The rent tracking website says the average rent for a two-bedroom apartment in San Jose is just shy of $2,800 a month.

In Fresno, it's $850.

That is sure to climb if Fresno becomes a hot growth destination but it would still be far cheaper than Silicon Valley.

The bottom line is housing stock just hasn’t been able to keep up leading to an effect like squeezing a balloon…the air has to go somewhere.

That somewhere was into towns in the north central valley that have boomed in population but also transformed communities and created a new class of super commuters.