The thing you don't mention is prop 13. Since prop 13 passed cities that have more residential and less commercial than average have had to either cut services

The thing you don't mention is prop 13. Since prop 13 passed cities that have more residential and less commercial than average have had to either cut services or in some other way deal with budget issues. Cities like Palo Alto manage to have good budget on having way more jobs than housing, San Jose the city that builds the most housing in Silicon Valley has continuous budget issues. San Jose did a study and found only high end condo high rises generate more in taxes than they cost the city in services, so now even they are being strict on what new housing gets built, under this atmosphere they may soon only allow downtown high rises as the only new residential. Since San Jose can't carry as high rents developers aren't getting financing that easily, with the threat of a recession and bubble talk all the time, the rumors are that they think rents will drop like the dotcom bust, so the pipeline will likely slow down. The rest of Silicon Valley, except for maybe Milpitas doesn't really build all that much housing. I think the situation will get worse before it gets better.