Although Watkins-Johnson had warned its new recruit about the cost of housing in Santa Clara County, Rodriguez wasn't worried. He had picked up a few brochures from real estate agents on his interview trip and seen houses he thought were in his price range. He told his wife he would move out to the West Coast, start working, and find a house as quickly as he could for them and their three kids.
Rodriguez liked California as much as he had dreamed he would. He enjoyed the weather, and he loved his job. But days, and then weeks, slipped by, and he didn't find a house. Apartments comparable to the one he had in New York were renting for more than half his monthly paycheck.
When the 30 days that Watkins-Johnson had agreed to put him up in a hotel ran out, Rodriguez moved in temporarily with a third cousin of his wife. He saw an $80,000 house 30 minutes from his job that he thought would do nicely, but he was turned down for a mortgage because he hadn't been working long enough. He didn't like the "starter houses" the real estate agents showed him. He was making a good salary, and he figured he and his family deserved to live in a nice place.
Finally, after six weeks, his wife had had enough. She told him she thought he ought to come home and find a job in New York. After talking it over, Rodriguez agreed. He broke the news to his new employer the next morning. Watkins-Johnson was "slightly astounded," Rodriguez says, but very understanding. His boss told him to fly home, talk to his wife, and make sure that moving back East was what he really wanted.
Rodriguez waited till he returned to New York City to make his resignation final, but resign he did. Today he is working for Sperry Gyroscope in Great Neck, N.Y.
Rodriguez's return to New York is a recruiter's nightmare. The difficulty of attracting young engineers to Santa Clara County has become one of the most talked about problems in the Valley. In spite of the weather, the ocean, San Francisco, and the Valley's reputation as a hotbed of innovation, bright young engineers are turning down Silicon Valley offers and instead taking jobs in Salem, Oreg.; Phoenix; Colorado Springs; and Durham, N.C.
"Young guys, recent graduates, come out from somewhere like Ann Arbor, spend a day going through the company, say they like what they see, and then go out to look at houses in the area and decide to go back to graduate school," says Charles McEwan, president of Ramtek Corp., a $46 million computer graphics company in Santa Clara, currently adding 75 to 100 employees per year. "We tell the guys with wives and three or four children to stay home, that the price of a four-bedroom house is out of reach."
It really shouldn't have been much of a surprise. The people who had come to work for Fairchild and Intel Corp. had helped double the population of Santa Clara County twice in 30 years, from 290,547 in 1950 to 1,265,200 in 1980. To accommodate Lockheed Missiles & Space, Hewlett-Packard, Memorex, and IBM, more than 40% of the potential housing capacity was earmarked for industrial uses, which meant 417,000 fewer housing units for high-technology employees. In 1980, Santa Clara County had 703,500 jobs but only 471,200 housing units, and the resulting shortage, aggravated by speculation, had nudged the average price of a house to well over $100,000. In 1980, 10,000 jobs went unfilled.
By February 1, 1982, when Rodriguez accepted the position at Watkins-Johnson, the orchards had been bulldozed for industrial parks, roads had been filled beyond their capacity, and downtown Sunnyvale had been razed for a shopping center. The San Jose Municipal Airport had become the ninth businest in the United States. The county had been built up so densely that it had less open space per resident than New York City.
The entrepreneurs found that while they had been inventing calculators that could fit on a watch face, the cost of industrial space had tripled. Says Ralph Ungermann, founder of Zilog Inc., and now Ungermann-Bass Inc.: "Space that leased for 40? a square foot in 1978 [when he left Zilog] was going for 80? a square foot in 1979 and is now up to $1.25." The price of raw land in Santa Clara County, when it can be found, is currently running $8 to $12 a square foot, compared with 20? a square foot in Austin, and 65? in Colorado Springs, according to Klaus Kramer, Rolm Corp.'s director of real estate and facilities planning. Late last year, Rolm couldn't even find the 125 acres it wanted for a new plant in South San Jose.
For a while, many of the entrepreneurs remained convinced that high-technology companies could cope with the problems. Managers responded to traffic problems with flexible work hours and ride-sharing programs. They paid higher rents, telling themselves it still wasn't as expensive as Boston or other East Coast metropolitan areas. They sometimes subsidized housing for key executives. They offered stock option plans and bonuses and sabbaticals to entice their employees to stick around. Durango Systems Inc., a $15 million company in San Jose, announced that it would give employees with four years of service a choice of a six-week paid sabbatical or round trip air fare for two anywhere in the world, plus $500 spending money and two extra weeks of vacation.
