Doing Business In The Bay Area

Introduction

The San Francisco Bay Area, colloquially known as the Bay Area, is a geographically and ethnically diverse metropolitan region that surrounds the San Francisco Bay in Northern California. It encompasses the cities of San Francisco, San Jose, and Oakland, and their many suburbs. It also includes the smaller urban and rural areas of the North Bay. As of July 2006, the Bay Area became home to 7.2 million people, up half a million people since 2005, the majority coming from international locations.  The Bay Area comprises of many cities, towns, military bases, airports, and associated regional, state, and national parks sprawled over nine counties (sometimes defined as ten or eleven counties) and connected by a massive network of roads, highways, railroads, bridges, tunnels and commuter rail.  San Francisco is the fourth most populous city in California and the fourteenth-most populous in the United States, with a 2006 estimated population of 744,041.  San Francisco is the second most densely populated major city in the U.S.

While San Jose is now the largest city in the Bay Area (having surpassed San Francisco in the 1990 census), for most of its history San Francisco was the most populous city. San Francisco remains the focal point and major cultural center in the region. The Bay Area has the highest median household and per capita income of any metropolitan area in the United States and is also one of the most politically liberal areas in the nation.  The cost of living is also one of the highest in the nation.

The San Francisco Bay Area is one of the wealthiest regions in the United States. According to the United States Census Bureau, of the 280 defined metropolitan areas, the San Francisco Bay Area has the highest median household income in the nation with $62,024 in the year 2000. The Census Bureau also released data in August 2006 citing San José as having the second highest median household income among large cities. Among medium-sized cities, Pleasanton has the highest household income in the country, and Livermore the third highest.

While only 26% of households nationwide boast incomes of over $75,000 a year, 48% of households in the San Francisco Bay Area enjoy such incomes.  The percentage of households with incomes exceeding the $100,000 mark in the Bay Area was double the nationwide percentage. Roughly one third (31%) of households in the San Francisco Bay Area had a six figure income, versus less than 16% at the nationwide level.  In June 2003, a study by Stanford University reviewing US Census Bureau statistics determined the median household income in the San Francisco Bay Area to be roughly 60% above national average. Overall the largest income bracket in the Bay Area were households making between $100,000 and $150,000 annually, who constituted roughly 18% of households. On a national level the largest income bracket were households with incomes between $30,000 and $40,000 who constituted 13% of all households nationwide.

Regions

San Francisco

The City and County of San Francisco is generally placed in a category by itself in terms of geography and culture even within the Bay Area, and is known locally as "The City". It is separated by water from the north, west and east, and by a county line from its neighbor cities to the South. San Francisco has long served as the cultural, financial and urban center of the region. For most of the Bay Area's history, it has also served as the key population center. However, the limitations of the size of the county (47 square miles, making it the second most densely populated major city in the United States after New York City) constrained the growth of the city and, since the 1906 San Francisco earthquake, other cities and counties have received the larger share of population growth.

North Bay

The region north of the Golden Gate Bridge is known locally as the North Bay. This area consists of Marin County and extends northward into Sonoma County and Napa County and eastward into Solano County. The city of Vallejo, being part of Solano County, is often considered the eastern most city of the North Bay, though due to a stronger cultural/socioeconomic similarity to many East Bay cities, it is also often considered the northern most city of the East Bay. With few exceptions, this region is quite affluent: Marin County is ranked as the wealthiest in the nation. The North Bay is generally the least urbanized part of the Bay Area, with many areas of undeveloped open space, farmland and vineyards. Santa Rosa in Sonoma County is the North Bay's largest city, with a population of 156,200 and a Metropolitan Statistical Area population of 466,477, making it the fifth largest city in the San Francisco Bay Area. The North Bay is the only section of the Bay Area that is not served by a commuter rail transit service, and Sonoma-Marin service was recently voted down. The lack of transportation services is mainly because of the lack of population mass in the North Bay, and the fact that it is separated completely from the rest of the Bay Area by water, the only access points being the Golden Gate Bridge leading to San Francisco, the Richmond-San Rafael and Carquinez Bridges leading to Richmond, and the Benicia-Martinez Bridge leading to Martinez.

The Peninsula

The area between the City and County of San Francisco and the South Bay is the San Francisco Peninsula, known locally as The Peninsula. This area consists of a series of small cities and suburban communities in San Mateo County and the northwestern part of Santa Clara County, as well as various towns along the Pacific coast, such as Pacifica and Half Moon Bay. This area is extremely diverse, although it contains significant populations of affluent family households. Many of the cities and towns had originally been centers of rural life until the post-World War II era when large numbers of middle and upper class Bay area residents moved in and developed the small villages. Since the 1980s the area has seen a large growth rate of middle and upper class families who have settled there as part of the technology boom of Silicon Valley. Many of these families are of foreign background and have significantly contributed to the diversity of the area.

East Bay

The eastern side of the bay, consisting of Alameda and Contra Costa counties, is known locally as the East Bay. The East Bay is split into two regions, the inner East Bay, which sits on the Bay coastline, and the outer East Bay, consisting of inland valleys separated from the inner East Bay by hills and mountains.

The inner East Bay includes the cities of Oakland, Hayward, Fremont, Berkeley, and Richmond, as well as many smaller suburbs such as Alameda, Hayward, Castro Valley, Newark, Union City, Emeryville, Albany, San Leandro, San Pablo, El Sobrante,Pinole, Piedmont, and El Cerrito. The inner East Bay is more urban, more densely populated, has a much older building stock (built before World War II) and a more ethnically diverse population. Oakland hosts the region's largest seaport and professional sports franchises in basketball, football, and baseball. As with many inner urban areas the Inner East Bay also features a high accumulation of crime as well as other socio-economic problems. According to the FBI Uniformed Crime Reports, more than 50% of all homicides in the Bay Area in 2002 occurred within the city limits of Oakland and Richmond. The homicide rates have steadily increased, as 2005 had the highest homicide rates for both Richmond and Oakland.
The outer East Bay consists the eastern portions of Alameda and Contra Costa counties and includes the cities of Orinda, Walnut Creek, Concord, Benicia, Martinez, Pittsburg, Antioch, and Pleasant Hill, and Lafayette to the north (also referred as Central Contra Costa County) and the cities of Dublin, Pleasanton, Livermore, Danville, San Ramon to the south (sometimes referred to as the Livermore-Amador Valley or the Tri-Valley), as well as other smaller towns, such as Alamo and Brentwood. They are connected to the inner East Bay by BART, interstates 80 and 580, and highway 24 via the Caldecott Tunnel. The outer East Bay is part suburban, part rural and its infrastructure was mostly built up after World War II. The upper middle-class white population is still the majority in this area.

South Bay

The communities along the southern edge of the Bay are known as the South Bay, Santa Clara Valley, and Silicon Valley. Some Peninsula and East Bay towns are sometimes included in the latter. It includes the major city of San Jose, and its outlying neighbors, including the cities Morgan Hill, Gilroy, and the high-tech hubs of Santa Clara, Milpitas, Cupertino, Sunnyvale, Palo Alto and Mountain View as well as many other suburbs like Los Altos, Saratoga, Campbell and Los Gatos. Generally, the South Bay is Santa Clara County, but the northwest portion of the county (Palo Alto and Mountain View) is often considered part of the Peninsula instead. Home of Silicon Valley, the South Bay was also an early development of working and middle class families who left the coastal cities of the Eastern Bay south of Oakland and Alameda. Large numbers of families during the post-World War era also moved there for the aerospace industry. This area has long been developed and expanded and is often featured as a stereotype of the typical California suburban city. Today, the growth continues, primarily fueled by technology and cheap immigrant workers. The result has been a huge increase in the value of property forcing many middle class families out of the area or into nascent ghettos in older sections of the region.

Befitting of the title Silicon Valley, this region is home to a vast number of technology sector giants. Some notable tech companies headquartered in the South Bay are Intel, AMD, Cisco Systems, Hewlett-Packard, Apple, Google, eBay,and Yahoo!. As a consequence of the rapid growth of these and other companies, the South Bay has gained increasing political and economic influence both within California and throughout the world.

Economy

Tourism is the backbone of the San Francisco economy.  Its frequent portrayal in music, film, and popular culture has made the city and its landmarks recognizable worldwide. It is the city where Tony Bennett left his heart, where the Birdman of Alcatraz spent many of his final years, and where Rice-a-Roni was said to be the favorite treat. San Francisco attracts the third highest number of foreign tourists of any city in the United States and claims Pier 39 near Fisherman's Wharf to be the third-most popular tourist attraction in the nation. More than 15 million visitors came to San Francisco in 2005, injecting nearly $7.5 billion into the economy. With a large hotel and restaurant infrastructure and a world-class facility in the Moscone Center, San Francisco also is a top-ten North American destination for conventions and conferences.

The legacy of the California Gold Rush turned San Francisco into the principal banking and finance center of the west coast. Montgomery Street in the Financial District is known as the "Wall Street of the West", home to the Federal Reserve Bank of San Francisco, the Wells Fargo corporate headquarters, and the site of the now defunct Pacific Coast Stock Exchange. Bank of America, a pioneer in making banking services accessible to the middle class, was founded in San Francisco and built one of the first modern skyscrapers in the city: Bank of America Center. Many large financial institutions, multinational banks and venture capital firms are based in or have set up regional headquarters in the city. With over thirty international financial institutions, six Fortune 500 companies and a large support infrastructure of professional services, including law, public relations, architecture, and graphic design also populating the downtown, San Francisco is one of ten Beta World Cities.

San Francisco's economy has increasingly become tied to that of Silicon Valley to the south, sharing a need for highly educated workers with specialized skills. It has been positioning itself as a biotechnology and biomedical hub and research center. The Mission Bay neighborhood, site of a second campus of UCSF, fosters a budding industry and serves as headquarters of the California Institute for Regenerative Medicine, the public agency funding stem cell research programs statewide.

Small businesses with fewer than ten employees and self-employed firms make up 85 percent of city establishments. The number of San Franciscans employed by firms of greater than 1,000 employees has fallen by half since 1977. The penetration of national big box retail chains into the city has been slow. In an effort to buoy small privately owned businesses in San Francisco, the Small Business Commission supports a publicity campaign to keep a larger share of retail dollars in the local economy, while the Board of Supervisors has used the planning code to limit the neighborhoods in which "formula retail" establishments can set up shop, an effort affirmed by San Francisco voters.

Demographics

As of the 2006 census, there were 6,927,555 people residing in the Bay Area. The racial makeup of the 9 County Bay Area was 47.29% White, 19.83% Asian, 0.67% Pacific Islander, 7.32% African American, 0.87% Native American, 9.46% from other races, and 5.28% from two or more races. 19.89% of the population were Hispanic of any race. 29.6% of the population was foreign born.

As of the 2006 census, there were 7,236,391 people residing in the Greater Bay Area. The racial makeup of the 9 County Bay Area plus Santa Cruz and San Benito Counties was 50.41 White, 19.96% Asian, 0.72% Pacific Islander, 7.35% African American, 0.90% Native American, 10.17% from other races, 5.46% from two or more races. 21.19% of the population were Hispanic of any race. 31.8% of the population was foreign born.

Affluence

The San Francisco Bay Area is one of the wealthiest regions in the United States. According to the United States Census Bureau, of the 280 defined metropolitan areas, the San Francisco Bay Area has the highest median household income in the nation with $62,024 in the year 2000. The Census Bureau also released data in August 2006 citing San José as having the second highest median household income among large cities. Among medium-sized cities, Pleasanton has the highest household income in the country, and Livermore the third highest.

While only 26% of households nationwide boast incomes of over $75,000 a year, 48% of households in the San Francisco Bay Area enjoy such incomes. The percentage of households with incomes exceeding the $100,000 mark in the Bay Area was double the nationwide percentage. Roughly one third (31%) of households in the San Francisco Bay Area had a six figure income, versus less than 16% at the nationwide level. In June 2003, a study by Stanford University reviewing US Census Bureau statistics determined the median household income in the San Francisco Bay Area to be roughly 60% above national average. Overall the largest income bracket in the Bay Area were households making between $100,000 and $150,000 annually, who constituted roughly 18% of households. On a national level the largest income bracket were households with incomes between $30,000 and $40,000 who constituted 13% of all households nationwide.

Six of the top ten California places with the highest per capita income are in the San Francisco Bay Area (Belvedere, Atherton, Woodside, Portola Valley, Diablo). Of the 100 highest income counties by per capita income in the United States, six are in the San Francisco Bay Area (Marin, San Mateo, San Francisco, Santa Clara, Contra Costa, Alameda). According to Forbes Magazine, published in 2005, 12 of the top 50 most expensive Zip Codes are in the Bay Area (Atherton, Ross, Diablo, Belvedere-Tiburon, Nicasio, Portola Valley, Los Altos-Los Altos Hills, Los Gatos-Monte Sereno, the Cow Hollow-Marina District of San Francisco, Alamo, and Burlingame-Hillsborough).

Forty-two San Francisco Bay Area residents made the Forbes magazine's 400 richest Americans list, published in 2006. Thirteen live within San Francisco proper, placing it seventh among cities in the world. Among the forty-two were several well-known names such as Steve Jobs, George Lucas, and Charles Schwab. The highest-ranking resident is Larry Ellison of Oracle at No. 4. He is worth $19.5 billion.

A study by Claritas indicates that in 2004, 5% of all households within the San Francisco and San José metropolitan areas held $1 million in investable assets, and Wells Fargo estimates that there are 180,000 millionaire households in the Bay Area, 10% of which have $5 million or more in assets.

Transportation

The Bay Area is served by many public transportation systems, including three international airports (SFO, OAK, SJC), six major overlapping bus transit agencies (AC Transit, Muni, SamTrans, VTA, Golden Gate Transit, County Connection) in addition to dozens of smaller ones, four rapid transit and regional rail systems including BART and CalTrain, two light rail systems (San Francisco Muni Metro and VTA Light-rail). There are also several regional rail lines provided by Amtrak, notable the Capitol Corridor in addition to those there are multiple public and private ferry services (notably Golden Gate Ferry), which are being expanded by the San Francisco Bay Water Transit Authority, the regional ferry hub is Ferry Building. AC Transit and some other agencies provide an extensive network of express "transbay" commuter buses from the suburbs to San Francisco Transbay Terminal.  Although the freeway and highway system is very extensive, many freeways are heavily congested during rush hour, especially the trans-bay bridges.

Seaports

The Port of San Francisco lies on the western edge of the San Francisco Bay at the Golden Gate. It has been called one of the three great natural harbors in the world, but it took two long centuries for navigators from Spain and England to find the anchorage originally called Yerba Buena. A port, as was said in its early days, in which all the fleets of the world could find anchorage.  The larger waterfront area extends from the anchorage of the Golden Gate bridge through the Marina district all the way around the north and then east shore of the city of San Francisco to the city line beyond Candlestick Point.  The Port of San Francisco is currently a semi-independent organization run by a five-member commission, appointed by the Mayor and approved by the Board of Supervisors.