Wayne Chen is acting division manager for the San José Department of Housing. Photo by Sergio Ruiz for SPUR San Jose on Flickr.

Everyone talks about the high cost of Silicon Valley housing, as if it were the next hot IPO.

But how “high” is it?

This spring, the median cost of a single-family home in San Jose was $851,000 and the median household income here was $81,800, for a cost-to-income ratio of over 10:1. The average monthly rent of a new, one-bedroom apartment in San Jose is approaching $3,000, which would require an annual income of about $120,000. Yikes!

Even though these prices make you swoon, costs in other Silicon Valley communities are even crazier. In Palo Alto, just up the road from San Jose, the median single-family home sales price in May was $2.75 million and the median household income was $121,000, for a ratio of over 22:1!  

It wasn’t this bad 40 years ago, the last time the Golden State Warriors won the NBA championship. Back in the mid-1970’s, the median cost of a house was about three times the median household income – which was in line with the national standard.

Not anymore. Our ratio is now off the charts, in the range of ultra-expensive cities such as London and Tokyo, whereas the current national ratio has remained steady.

These high costs do signify one positive thing: the innovation economy of Silicon Valley has created unprecedented wealth and amazing technologies that have changed the world and fueled a local employment boom.

The serious downside is that growing income inequality and the mismatch between the growth of jobs and the dearth of affordable housing in our region threaten our long-term economic and social resilience, harm the environment by increasing commute distances, degrade the quality of life and civic engagement and erode the diversity and inclusiveness of our cities.

So what can we do to close the gap of housing affordability?

With generous support from Knight Foundation, the “Housing 2.0: Reimagining the Housing System” symposium will bring together doers, thinkers, funders and builders to envision a housing delivery system for a more balanced, sustainable and equitable Silicon Valley that will be good for everyone.

“Housing 2.0” begins with the assumptions that we’re all in this together, and that we have a shared responsibility for the future. We have an opportunity and an obligation to take advantage of the entrepreneurial spirit and deep resources of Silicon Valley to solve our housing challenges.

For the past several decades, we have left market-rate housing to the for-profit sector and affordable housing to the public and nonprofit sectors. But this model has not worked very well. To wit: While Silicon Valley has produced 120 percent of its market-rate housing needs from 2007-14, it has only met 25 percent of its affordable housing needs because the need is so much greater than the resources and tools available.

This disparity is even more challenging for those who need housing the most, such as the homeless. We’re also not building enough of the right type of housing in the right places: smaller, more efficient or mixed-use designs in transit- and amenity-rich locations. Finally, where people live and work is interrelated and occurs on a regional scale, yet we lack adequate regional solutions for both.

I’m optimistic that we can figure out solutions to the housing challenge. The first step begins with the space to ask the right questions, the hard questions and to connect positive problem-solvers with each other to imagine new systems. That space is ​“Housing 2.0.”