The row crops and cattle ranches of San Benito County are remarkably similar to those of Santa Clara County during the pre-Silicon Valley era. But, just as the computer chip has transformed Santa Clara County into one of the world's great industrial centers, it is now exerting influence on rural San Benito County, where land remains available and relatively inexpensive. San Benito's predicament is the result of Santa Clara County's well-known jobs-housing imbalance. And the disparity only gets worse, according to the Silicon Valley Manufacturing Group, which has established a Housing Trust Fund Initiative. Since 1992, Silicon Valley has created 250,000 jobs, but only 50,000 housing units, according to the organization. In a market that is already off-kilter, the result is astronomical real estate prices. The median single family home price in Silicon Valley reached $392,000 this spring. Rental vacancies are rare, and double-digit rent increases are common. San Benito is only the latest county to feel the effects of the Silicon Valley economic machine. Portions of Alameda, Contra Costa, San Joaquin and Stanislaus counties have already been converted into bedroom communities. Silicon Valley workers often must commute an hour, 90 minutes or even longer each way to reach work. "We surrounding counties are Santa Clara County's affordable housing, which means there is no housing for our people," said Rob Mendiola, San Benito County planning director. Public and private agencies are taking a more active role the situation, which some people fear threatens continued economic growth. "Companies are starting to realize one of their biggest problems is attracting qualified employees," said Christina Perry, spokeswoman for the Silicon Valley Manufacturing Group. "They (recruits) get off the plane and look around at housing, and then they get back on the plane as fast as they can." Thus, the organization started the Housing Trust Fund, with the goal of raising $20 million during the next two years. Already, five companies — Adobe Systems, Applied Materials, Inc., Cisco Systems, Kaufman and Broad, and Solectron Corporation — have given $200,000 each. Also, Santa Clara County has provided $2 million and the City of San Jose has pledged $1 million to the trust fund. "When it comes to the housing issue, it's recognized across the board as critical," said Giesela Bushey, the Housing Trust Fund project director. "There's a lot of momentum behind this effort." The official fund-raising campaign is scheduled to begin in October, said Bushey, who was unsure when the first grants would become available. Community Foundation Silicon Valley will actually administer the funds. As designed, the Housing Trust Fund would provide about one-third of its money to each of three areas: housing for homeless and very low-income families, new and rehabilitated affordable rental units, and first-time homebuyer assistance with down payments and closing costs. San Jose increases efforts The City of San Jose, home to slightly more than half of Santa Clara County's 1.6 million residents, also stepped up its housing program this year. The city has financed construction or rehabilitation of about 8,500 units during the last 10 years. Under a program adopted by the City Council in April, the city would finance that many units during the next five years, said Alex Sanchez, the city's housing director. The plan calls for the city to take a larger role in development, rather than acting primarily as a lender. To meet the goal, the city has earmarked an additional $30 million for housing, Sanchez explained. Still, creativity is essential. For every dollar the city has spent in the past 10 years, the city has leveraged four dollars from banks, other government lenders and equity partners. Because of the high cost of development and the large subsidy necessary to make units affordable for low- and moderate-income families, up to six funding sources may be necessary for a single project, according to Sanchez. Redevelopment is a mixed blessing for the city. Cisco Systems, for example, plans 5 million square feet of industrial development during the next 18 months, all in a redevelopment area, Sanchez said. That sort of development will provide a great deal of tax increment to finance housing programs, but it also will demand thousands more workers. Less than two months after San Jose boosted its housing program for the next five years, mortgage lender Fannie Mae announced a multi-billion program for the same time frame. Fannie Mae's House Bay Area program will provide assistance throughout the Bay Area, but it pinpoints San Jose, San Francisco and Oakland. Officials said the program will help 13,000 San Jose residents find affordable homes. Fannie Mae will offer down payment assistance for low- to middle-income families, ease mortgage eligibility requirements for immigrants, loosen underwriting standards for people willing to live near public transportation, and provide other assistance. Too little too late? Even by conservative estimates, Silicon Valley needed 100,000 additional housing units yesterday to satisfy demand. And indicators point to an uglier housing situation. A 1997 study by the Hausrath Economics Group predicted job growth would be more than double the number of new housing units over the next 20 years. Since Hausrath completed the study, Cisco Systems announced plans for a 400-acre, 20,000-employee campus in south San Jose's Coyote Valley. In the City of Mountain View, in northern Silicon Valley, the 1992 general plan identified 1.5 jobs per employed resident, and the plan predicted 1.63 jobs per employed resident in the future. "It's essentially impossible to redress a jobs-housing balance at this late date," said Mike Percy, Mountain View's principal planner in charge of long-range planning. Because the city is 98 percent built-out, options are extremely limited, he noted. The city of 75,000 residents has added 7,000 to 10,000 jobs during the last five years, depending upon how one accounts for the recession. But only about 2,000 new housing units have been approved or are in the planning process, he said. About half of those units are on land previously zoned commercial. Bushey, whose Housing Trust Fund would initially assist about 5,000 families, said it is not too late to tackle the issue in Santa Clara County. But, she agreed, time is critical. Back in San Benito County Silicon Valley's latest relief valve lies to the south. San Benito County and its county seat of Hollister, about an hour's drive from San Jose, have felt growth pressure from their northern neighbor for about two decades, but that pressure has risen in recent years, said Mendiola San Benito's planning director. And 1999 could be a pivotal year, as the City of Hollister has reached its wastewater treatment capacity, and county officials are considering a measure that would limit growth. San Benito County — with a total population of 48,000 and an unincorporated population of 17,000 — already has applications for the 1,100-unit Northeast Fairview development just east of Hollister, and for Paicines Ranch, a 1,500-unit subdivision and golf resort 12 miles south of Hollister. There are rumblings about another 1,000-unit subdivision, and a handful of smaller projects are working through the system, said Mendiola, the county planning director. Plus, Cisco's Coyote Valley plan would put high-tech jobs even closer to San Benito County. The momentum is difficult to fight, as evidenced by the uproar over a proposed 1% annual growth cap in unincorporated areas. The Planning Commission sent the proposal to the Board of Supervisors without a recommendation. Well-paid Silicon Valley workers have already skewed the San Benito housing market. Now, it is not unusual for people working at lower-paying jobs in the Hollister area to live in Los Banos — a mountainous 50-mile drive away — because they cannot afford the local housing market, Mendiola said. Mendiola would like to see Silicon Valley share some of the commercial and industrial riches with San Benito County, which cannot afford to provide services to existing houses, let alone new ones. "We need to decentralize the jobs," Mendiola said. "From a planning perspective, I think we need to build balanced communities. But there is nothing that encourages that. In fact, our taxation policies discourage residential uses." Contacts: Rob Mendiola, San Benito County Planning Department, (831) 637-5313. Mike Percy, Mountain View Community Development Department (650) 903-6306. Alex Sanchez, San Jose Department of Housing, (408) 277-5817. Giesela Bushey, Silicon Valley Manufacturing Group Housing Trust Fund, (408) 501-7864. Housing Trust Fund Web page: www.svmg.org