Growing Trend: People Working in Berkeley Can't Afford to Live Here, Report Says

Only a small proportion of people who work in Berkeley live in the city, and the percentage continues to decline in the face of high housing costs, according to the first in a newly initiated series of city reports on Berkeley's economic development.

"Only about 17.1% of the jobs in Berkeley are actually held by Berkeley residents, a proportion that has declined over time as the somewhat higher than average rents and home prices in Berkeley has caused more people employed here to look elsewhere in the region for housing," according to the report prepared for the City Council by the city's Economic Development Manager, Michael Caplan.

The 34-page document is the first in a series of quarterly reports requested by the council in December on Berkeley's economic development in 2013, Caplan said.

It focuses on employment and retail sales trends.

While many of the trends identified in the city mirror state and regional trends, some offer a marked contrast.

Berkeley appears to be a popular place for eating out, for example, with the percent of retail sales tax revenue that the city receives from restaurants ranking well above the state average.

"Restaurants now generate 20% of our retail sales tax revenue, an unusually high proportion (in California as a whole it is 14%)," the report said.

The robust performance of the food sector stands in contrast to Berkeley's overall retail trend, however. Sales tax revenues as a whole have declined in constant dollars.

"Berkeley has lost sales tax revenue since at least 1990 when our data source from the City’s sales tax auditing firm, MuniServices, begins," according to the report. 

The report notes that the lagging retail sector corresponds to increased shopping on the Internet and in big-box stores in Emeryville and by the net loss of at least 4,000 jobs in recent years, despite a growth in population from 102,743 in 2000 to 112,580 in 2010, with an estimated 114,821 on January 1, 2012. Much of the population growth consists of students with limited disposable income, the report says.

The report cites March 2012 data showing 3,604 workplaces in the city employing 60,165 workers, an increase of 173 places of employment over a year earlier but a drop of 550 employees, chiefly in government and healthcare.

One striking contrast is the percent of households reporting income from self-employment, with the American Community Survey of the U.S. Census showing 21 percent of Berkeley households (9,599 out of 44,904) with some self-employment income, compared to the U.S. average of 11.6 percent.

"A lot of the energy and creativity in Berkeley comes from its many artists, craftspeople, writers, consultants, and other self-employed and the success at least some of them are enjoying helps to mitigate the discouraging employment trends discussed above," the report says. 

Among the bright signs are Berkeley's relatively low unemployment rate, 7.8 percent, compared with 8.2 percent in Alameda County 9.7 percent in the state. The report attributes the difference to the residents' high education levels.

"Clearly, it is the fact that 69% of the population in Berkeley over 25 years of age has a bachelor’s degree or higher that explains why our city always has an unemployment rate below the State and County average," the report says.

The report, prepared for the March 5 council meeting, is attached to this article.