There is no doubt that Palo Alto is rich, or as Palo Alto teens might say, hella rich. The city was ranked third by CNNMoney.com in a report published last month of the top-earning cities in the United States. With a population of slightly more than 60,000, the median family annual income is more than $153,000 and the median home price is a whopping $1.18 million, according to the same report.
The affluence of Stanford’s next-neighbor highlights the ways, both major and minor, in which the University maintains economic ties to surrounding cities and the region as a whole. Along with providing students career and housing options, Stanford’s relationship to its surroundings rests in many ways on numbers — local gifts to the University, employment and spending by Stanford.
Take gifts, for example. Stanford receives some gifts and bequests — funds that are not expendable in the current year and not counted into the income — from the community. In 2006, $22 million in gifts and bequests came from Palo Alto, of $869 million total, according to an economic impact study published in 2008.
Students, for their part, send a large total back into the city, with a third of their $156 million spending in 2006 going to Palo Alto, according to the same report. Yet many students encounter high prices, both for shopping and housing, when venturing off-campus.
“With the affluence in Palo Alto, students are much more insular,” said Abra Jeffers, a doctoral student in management science and engineering. “There is little interaction between Palo Alto citizens and students. When there is interaction, it is usually regarding business.”
Graduate students seeking housing off-campus especially encounter this reality.
“Palo Alto’s high property values mean that rental costs are high as well,” said Jean McCown, Stanford’s director of community relations. “This means that Stanford graduate students who might wish to rent off-campus will definitely encounter higher rental costs than in some other nearby communities.”
In total, Stanford and its students, visitors and employees spend locally by the billions, not just in apartment rent. Through SLAC National Accelerator Laboratory, Lucile Packard Children’s Hospital and Stanford Hospital & Clinics, $2.1 billion in local expenditures went to Santa Clara and San Mateo Counties in 2006 according to the study, compared to $1.6 billion heading outside of those two counties. ($1.2 billion came from spending by employees, visitors, students and other entities on Stanford lands.)
Palo Alto alone was on the receiving end of $621 million of direct Stanford expenditures.
Stanford also provides a hiring engine for the region: in 2006, Stanford was the largest employer in the Silicon Valley, employing more than 20,000 people that year, 4,000 more than the second-largest Silicon Valley employer, Cisco Systems, Inc.
Some say the area returns the favor, boasting highly educated residents and attractive job options. In a recently published study by the Brookings Institute ranking metropolitan areas on educational attainment, the San Jose-Sunnyvale-Santa Clara area, which includes Palo Alto, was ranked third in the nation, with 43.8 percent of its adults age 25 and older having a bachelor’s degree.
That could be part of the appeal for some job-seeking students.
“The high educational attainment draws more intelligence and it is self-attracting,” Jeffers said. “For me, I came to Stanford University because I knew that I would be able to interact with all kinds of intelligent people on campus. On other campuses, I would be a lot more independent and wouldn’t have the same resources around me.”
“With the high affluence or Palo Alto and the Silicon Valley in general, we definitely are surrounded by a pretty exciting job market,” added Lance Choy, director of Stanford’s Career Development Center. “Local employers like local students. We definitely have opportunities that aren’t present on other campuses.”