More money, more riders
The transportation systems in the Bay Area have done a good job of collecting and disclosing consistent data on rider numbers and revenue for almost two decades. It took some wrangling, but I was able to pull and chart those figures for both BART and Caltrain.
The figures hit new highs in the 2011-12 fiscal year, with gradual growth, notwithstanding a few more pronounced ups and downs.
One data point stands out in this category. The number of passengers on BART grew almost 7 percent from the 2010-11 fiscal year to 2011-12 fiscal year. That might not sound like a big deal, but it’s a growth rate that hasn’t been seen since 2001.
Numbers are not yet available for the 2012-13 fiscal year, but the agencies are expecting more riders for the current fiscal year.
One could say it’s only natural for rider numbers and revenues for these systems to go up all the time. After all, the U.S. Census has shown population growth in San Francisco and San Jose from 2000 to 2010 — 3.67 and 5.7 percent, respectively — and Census estimates for 2011 and 2012 show continual growth. But one could also chalk up these trends to real economic shifts.
“Economic activity, and particularly employment, is the No. 1 driver of all of this data — traffic counts, congestion, transit ridership,” said John Goodwin, a spokesman with Metropolitan Transportation Commission, a state agency focused on the Bay Area. “The economic well-being of the region, the economic strength of the region, and particularly employment, is the No. 1 factor across all of these categories. Now, how do we quantify that? It’s a harder ask, but when people are working, congestion is up, transit ridership is up, and conversely when folks aren’t working, we see less congestion, lower traffic counts, and lower ridership.”
Which brings me to the other kinds of data.
Jobs? Yes. Real estate? Not so much
In San Francisco, as the INRIX index growth rate has peaked, there have also been clear changes in conventional economic indicators. Zillow’s home values index in the city went higher than it’s been in years this August, according to data on file with the city and county of San Francisco’s office of the controller. Zillow’s own website only goes back to 2004.
The unemployment rate in the city has fallen lower and lower, most recently to 5.3 percent in October.
It’s worth noting that if this is a bubble, it doesn’t seem to have arrived at its peak. In December 1999, the unemployment rate in San Francisco was 2.4 percent. The lowest it’s been in the past few years is 5.3 percent, in May, September, and October of this year.
From the first quarter of 2010 to the third quarter of 2013, the average vacancy rate has gone down consistently, most recently hitting 11.2 percent. It could go still lower. In the first quarter of 2008, the rate was around 9.2 percent. Data only goes back to 2005, so it’s hard to compare with the tech bubble.
The total number of international enplanements and deplanements at San Francisco International Airport, according to airport data, soared higher than ever in August: 984,955.
And the average quarterly residential asking rent in San Francisco set a record in the third quarter of this year: $3,096. (I can hear Jimmy McMillan yelling from New York that the rent is too damn high.)
In other words, speaking very generally, as traffic and transit rider numbers goes, so go real estate, employment, and tourism metrics.
In case you were wondering, home value in San Jose hasn’t yet eclipsed what it was in the mid 2000s, according to data from Zillow.
As for the unemployment rate in San Jose, state data shows that its plunge looks almost the same as the one that’s taken hold in San Francisco, except that the most recent rate — 7.1 percent for October — lags behind San Francisco’s.
That hasn’t always been the case. At times in 1998, 2000, and 2001, San Jose’s unemployment rate was lower than San Francisco’s, and as a rule the rates were closer to each other than they are now, according to data from the U.S. Bureau of Labor Statistics.
Today, anecdotally speaking, startups tend to gravitate toward San Francisco, while legacy vendors typically stick around in Silicon Valley, including in San Jose. Perhaps the recovery-slash-bubble is affecting San Francisco slightly more strongly than San Jose. But while certain conditions might be different in the two cities, the general theme seems to be in play from the bottom of the peninsula to the top.
The verdict on the bubble
At least it looks like there’s a theme worth talking about at the conclusion of this unscientific exploration of data. There isn’t enough evidence to say traffic and transit data are leading indicators for the economy. Still, it’s neat to see them falling in line with larger trends in the other kinds of data.
A gut instinct might have encouraged you to wonder about the link between traffic and the economy. Now you have the data to prove it. Just don’t ask if this is a bubble.
“We’re in recovery, but where’s the dividing line between recovery and bubble?” Goodwin said. “… That would be a tough question to answer definitively.”
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