Growth…
Glen Loma Project East Side of Santa Theresa Boulevard, Gilroy
the haunting issue facing the South Santa Clara Valley
It's Complicated, Very, Very Complicated
Written By Larry J. Mickartz
F
or growth to happen, a number of
things need to line up. The driving
force for growth is the desirability
of the location. Growth happens in
places where there is a perceived value.
That value or desirability might be
that a community has a strong sense
of community and involvement or has
been designated as a good place to raise
kids and has a good school district.
Other desirability factors include lots of
open space, parks, greenbelts, cleaner
air and/or less traffic and congestion. A
community’s sense of identity may be a
factor, or its lower cost of housing and
the availability of single family homes.
Vibrant downtowns such as Morgan
Hill’s are also considered a valuable
component in making people want to
live in a community. All in all, it is clear
that the South Santa Clara Valley pos-
sesses many desirable components and
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is a place where people want to live. The
population growth proves that. The one
downside is that most would-be residents
want single family homes. Consequently,
the proportion of single family homes
versus rentals and attached or multi-
family homes is much higher than in
northern Santa Clara County and the
state of California. In 2013, Morgan Hill
had 65.5 percent single family homes;
Santa Clara County had 53.4 percent and
the State had 57.9 percent.
The history of growth in South
County over the past 60+ years reveals a
few interesting points. According to the
U.S. Census, the population of Morgan
Hill in 1950 was 1,627 and Gilroy was
4,951. By the 1970s, the San Jose area
experienced the growth of companies
like IBM and Intel thereby pushing
growth down the valley. Morgan Hill and
Gilroy started to experience phenomenal
GILROY • MORGAN HILL • SAN MARTIN
JUNE/JULY 2018
growth. Between 1970 and 1980 Morgan
Hill grew by 163 percent and Gilroy by
71 percent.
Another piece of the growth puzzle is
that while local city governments are the
most responsible for growth decisions,
not much of the income from property
or sales taxes derived from that growth
is realized on a local level. Actually, only
about ten percent of property taxes come
back to local cities and only one percent
of the nine percent sales tax comes back
to the City, or 11.1 percent of the total
sales taxes collected. Gilroy's and Morgan
Hill’s tax rates are currently at 9 percent.
Put simply, a million dollars in retail sales
generates less than $10,000 each to the
cities of Morgan Hill and Gilroy.
It should be noted that residential
development in itself does not gener-
ate enough in taxes to sustain city ser-
vices. Residential development pays for
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