San Diego’s Innovation Economy, and What it Takes to Recruit “The Young and Restless”

9/28/11Follow @bvbigelow

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live in an urban center than a suburban area. That preference increased to 12 percent in 1990, 29 percent in 2000, and was 42 percent in 2010.

—In 2000, 44 percent of the residents in neighborhoods within three miles of the urban core had four-year college degrees, compared with 31 percent of the residents in the overall metropolitan area. By 2009, 53 percent of the residents in close-in urban neighborhoods had four-year degrees, while 34 percent of the metro population had college degrees. “It used to be the case that the suburbs were the better-educated,” Cortright says.

—The Detroit metropolitan area has been losing its population since 2000, but the population of the city’s urban core has been growing.

One of the key challenges for many cities has been housing affordability. Last month, the median price for all types of homes in San Diego was $320,000, according to DataQuick, which tracks residential real estate trends. That’s down substantially from San Diego’s peak median home price of $517,500 in November, 2005. Even so, only about 64 percent of San Diego households can afford to buy an entry-level home in San Diego, according to the California Association of Realtors housing affordability index.

“Metro areas with the highest housing affordability [ratings] are just hemorrhaging young adults,” Cortright says. So the challenge turns on the question of whether communities can build the kind of housing that young adults will find affordable. Building multi-family housing near the urban core in neighborhoods that are walkable, bikable, and with nearby public transit makes it possible for young adults to give up their cars—and apply the income that would have gone to car payments instead to their monthly mortgage payments.

“San Diego is never going to have cheap housing,” Cortright says, “and I think the way you compensate for that is to have this package of amenities that attract young people.”

Still, it takes time to apply these lessons to urban planning and development. In the meantime, Cortright says San Diego’s economic development is being drive by the ability of human resources departments at big companies to attract young, talented workers—”and it’s not by who has the cheapest tilt-up concrete buildings in an industrial park.”

It reminds me of a conversation I had recently with Active Network CEO Dave Alberga, who says it has been a challenge for the Web-based media and events company to recruit talented executives, because they tend to view a job offer in San Diego as a “two-step” move.

A two-step move?

The first move, Alberga explained, occurs when an executive has to uproot his or her family to move to San Diego for a new job. If the job doesn’t work out, however, the scarcity of other Internet companies in San Diego would make it harder to find another job in the same locale. So the second step comes when the executive has to uproot the family a second time to move out of San Diego for a job in another city.

In this respect, Cortright says San Diego has plenty of competition.

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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  • http://fashioningchange.com/blog/kevin Kevin Ball

    This article has a lot of important points, but I think it is important to note that there are areas of San Diego that do fit what young, talented people are looking for: Downtown, plus the uptown stretch of Hillcrest, North Park, and University Heights.

    These areas are walkable, have reasonable public transit, and the uptown areas in particular contain a wonderful mix of local shops and restaurants.

    The problem is that most of the tech office space in San Diego is up in North County, inaccessible by public transit and far from the areas where this generation wants to live.

    There are, however some promising trends.

    There has been a proliferation of new coworking spaces like the AI Center on Convoy, 3rdspace in University Heights, and the rumored new EvoNexus space downtown. And there are startups sprouting up in those spaces… a recent map of San Diego Startups by Bastos Ventures (see http://watch.bastosventures.com/category/san-diego/startups/) showed a strong cluster downtown.

    The tech meetup scene has also been booming; in the last 2 years the Tech Founders meetup group has at least doubled in size, the SD Ruby meetup group has gone from 1 meetup a month to 3, and new groups like the San Diego Javascript meetup group have gotten going. At all of these events, recruiters trying to hire outnumber available engineers many to one.

    There’s a flurry of positive activity… the question to me is how to sustain and accelerate it, and for that we’ll need more visibility outside of the region to attract more funding and get rid of that “two-step move” perception.

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