Silicon Valley is richer than ever. Fewer residents are sharing in it.

Khang Phan rents a four-bedroom home in San Jose with his wife, their toddler, and his parents. For $3,500, he and his wife share one room, his parents share another, and the third is for the two-year-old.

Phan, a 29-year-old government worker, said that even though his family’s income tops six figures, they strictly limit eating out and shop at Costco for essentials. His wife works odd hours doing makeup for a few extra hundred dollars a month.

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“With childcare costs and the rent, we’re living paycheck to paycheck,” he said.

As Silicon Valley generates unprecedented wealth, a new report finds that economic gains are increasingly tied to investments owned disproportionately by the region’s more affluent residents, contributing to widening gaps in who shares in the growing prosperity.

With investment returns rising faster than local wages and salaries, the financial disparities threaten to become even more entrenched, furthering demographic shifts already straining the Valley’s workforce, schools and health care systems.

Joint Venture Silicon Valley, the nonprofit think tank behind the report, attributed the asset imbalance in large part to the venture capital model the region helped pioneer. It’s now common for major tech companies and fledgling start-ups alike in the Valley to grant investors and employees stakes in ownership, such as stocks and other equities, which can grow exponentially.

“That created a pathway to wealth that we never imagined,” said Russell Hancock, president and CEO of Joint Venture.

According to the 2026 Silicon Valley Index report, about 70% of households in the region earning more than $200,000 a year collect investment income — including earnings from stock dividends, bond interest and other returns. That’s compared to less than 1% of those making under $200,000, highlighting how asset ownership is exacerbating the Valley’s economic divides.

Such investment gains have more than doubled over roughly the past decade to a record high of $95 billion in 2023, outpacing wage and salary growth, according to the index. Those earnings did not include capital gains, including from stock market sales.

At the same time, income inequality in the Valley has risen at twice the national rate, the index found, as the top 10% of households — excluding the region’s 66 billionaires — now own about three-quarters of the region’s cash and liquid assets, including stock investments. The bottom half, meanwhile, holds just 1%.

The report, released Wednesday, focuses primarily on Santa Clara and San Mateo counties, but some data points include San Fransciso and southern Alameda County.

Mark Hornung of Half Moon Bay has retired from a career in marketing, including at the Santa Clara semiconductor giant Intel. He said he made good money and lives off a retirement fund the company matched well. But without major investments of his own, Hornung said he lives in a mobile home park for adults 55 and older with his wife and drives a 26-year-old Volvo convertible.

When Hornung moved to the coastal city in San Mateo County four decades ago, his wealthy neighbors would drive BMWs. After the community around him transformed from a farming and fishing hub into a “bedroom community for Silicon Valley,” today’s rich drive Aston Martins and Ferraris, he said.

“The stock rewards really distort a lot of people’s perspectives,” Hornung said. “You’re almost living in a bubble. And you’re not aware of people who don’t have what you have.”

Soaring housing costs

The Valley’s astronomically high housing costs are yet another indicator of the region’s staggering economic inequality.

The median price of a single-family home in the region reached $1.98 million at the end of 2025, nearly five times the national figure, according to the index. Only about a quarter of potential first-time buyers in the Valley could afford a median-priced home last year, compared to around half nationally.

To afford the soaring prices, families are increasingly cashing out their stock and equity holdings, tools available only to a limited portion of the people who live here.

The trend has accelerated over the past half-decade as the stock market has climbed, becoming even more widespread this past year amid the Valley’s artificial intelligence boom, said Valley realtor Ken DeLeon.

“Usually, tech stocks doing well is the way for talented people to get into the market,” he said.

For those unable to afford buying a home, the rental market is hardly less forgiving.

Last year, inflation-adjusted rents in the region averaged roughly an eye-popping $3,000 per month for apartments and $4,200 for single-family homes, the index found. About 40% of renters spend more than a third of their income on housing — a level that classifies them as cost-burdened — with 21% paying more than half their earnings on rent.

Meanwhile, three out of every 10 young adults, ages 18 to 34, in Silicon Valley live in their parents’ home, according to the index.

Population shifts

The struggle to afford housing is also among the main drivers of key demographic shifts now reshaping Silicon Valley.

One of the starkest examples is a 15% decline in the number of children under 18 living in the region over the past decade, according to the index. That’s battered school enrollment, forcing districts to consider closing campuses in some neighborhoods, angering many parents, students and staff.

“The San José Unified community has changed substantially within the past decade,” the district wrote in a recent message to the community explaining potential closures. “Like many places in the Bay Area, the high cost of living has meant that many families have moved away, and fewer babies are being born.”

While a surge in outmigration from the Valley unleashed by the COVID-19 pandemic and remote work has subsided, more residents are still leaving the region than arriving from other parts of the United States. That trend has continued for nearly three decades. Last year, excluding international immigration, about 20,000 more people left Silicon Valley than arrived, according to the index.

The trend intensifies labor shortages across industries, including construction, health care and education, as more workers reach retirement age.

But for Randy Musterer, owner of Sushi Confidential restaurants in Campbell, Morgan Hill and San Jose, one of the main workforce challenges is competing with tech giants such as Google and Facebook, which are looking to poach his sushi chefs and catering staff for their campus cafeterias.

It’s one way the equity-heavy compensation model shapes competition across the region’s labor market.

“They offer better health benefits and potential stock options,” Musterer said.

The Valley’s aging population is also weighing on the region’s health care systems, as providers grapple with how to keep up with a growing demand for care.

Mack Williams, a case manager for the Institute on Aging, a nonprofit serving seniors in Silicon Valley and San Francisco, helps seniors access health care and navigate housing programs. Williams, 25, keeps an eye on her clients with home visits. Many of them are immobile for health reasons and live on public disability assistance, which the federal government caps at $994 per month, she said.

“In terms of who is suffering the most, it’s the senior population,” she said.

Even for households earning solid six-figure incomes, rising rent, child care and grocery costs make it difficult to save — let alone invest and build wealth.

That’s especially true for Phan, the San Jose renter who shares a home with his parents and his own family.

“Everything is so much more expensive now,” he said.