Newborn is Silicon Valley's three millionth resident

SANTA CLARA, Calif. (KGO) -- Silicon Valley reached a new milestone on Tuesday. Not an electronics breakthrough, but one that could have a profound impact on our lives in the Bay Area.

Just a few hours old, Max Danner is getting showered with gift baskets. A combination of births and immigration is once again fueling population growth at a rate of 1 new person every 16 minutes, or nearly 90 people a day.

With that come challenges, such as housing. In San Jose, rent and home prices are up 10 percent in the past year, up 25 percent from two years ago. Workers need a 2.6 percent pay raise just to keep up with the cost of living.

"A lot of Silicon Valley employers don't understand that the cost of living in Silicon Valley is changing and increasing more rapidly than the rest of the state or the nation, and if you don't give your employees a raise every single year of that increment, then they're actually losing money," said Rachel Massaro with the Silicon Valley Institute for Regional Studies.

Massaro just completed an analysis of key Silicon Valley economic indicators. And even as the economy has come back, women are waiting two years longer to have a first child. San Jose resident Grace Bolton waited.

"I was 31 when I had my first child and 36 with my second," she said. "I'm noticing nowadays all my girlfriends are about that age range."

High housing costs mean some young families can't afford single family homes.

"They're starting with the condos and townhomes now because they have to," said Barbara Lymberis with Perfect Harmony Properties. "There are not that many single family homes that are available in the lower price ranges anymore."

Silicon Valley continues to be a magnet. But with the birth rate declining, schools will see a projected 5 to 8 percent drop in enrollment in the next decade.

New parents Dan and Bing Yuan have high hopes for their newborn son Max.

"I hope he can become a scientist and artist," said the new mother.

It's something entirely possible in Silicon Valley.