Choking to death on its own success, Silicon Valley already has worse freeway congestion than New York City and faces a shortage of 100,000 homes by 2010, according to a study released yesterday by a leading industry group.

The 30-page "Silicon Valley Projections 99'' report by the Silicon Valley Manufacturing Group made 10-year projections in four areas that affect the business climate and quality of life: housing, transportation, education and the environment.

Among the study's projections:

-- Between 1995 and 2010, some 400,000 jobs will have been created, but only 100,000 homes. With an average of 1.9 workers per household, the result is a need for of 100,000 additional homes.

-- Freeway congestion in Silicon Valley, when measured by time spent waiting in traffic, has surpassed that of New York City and Chicago, and will surpass congestion in Los Angeles in three years.

-- As Silicon Valley's population increases, school enrollment is expected to increase by 20 percent during the same period. One in five of those children will have limited English proficiency.

The study was released at a daylong conference at Stanford University that drew 300 people with government, high-tech, education and nonprofit backgrounds. Business groups have been worried for years about the Valley's ability to attract and retain workers, but the situation is reaching a crisis point, according to panelist Keith Kennedy, chief executive officer of Watkins-Johnson.

"We're able to entice workers for three to four years, but employees are leaving when they become most productive. We're training people for other areas like Austin (Texas), Colorado and Seattle,'' where housing costs are lower and the quality of life is better, he said.

With supply limited, housing prices continue to soar in the Bay Area.

Less than 30 percent of households can afford a home in the Bay Area compared to more than 50 percent of all households nationwide, according to the study. From 1995 to 1999, housing prices rose by 34.2 percent in the nine-county Bay Area, but they rose even more -- 46.2 percent -- in Silicon Valley.

"Unless we expect people to crash in their cubicles at work, then we have to grapple with the housing problem,'' said Carl Guardino, president and CEO of the Silicon Valley Manufacturing Group.

Former San Francisco mayor Art Agnos, now a representative for the Department of Housing and Urban Development, said one answer is to enlist the private sector to put pressure on public officials.

"We must convince the private sector to adopt affordable housing as a business essential today,'' he said.

He also said successful endeavors such as rezoning Agnews State Hospital land for housing, as well as initiatives like the Housing Trust Fund in Santa Clara County, which has already raised $4 million out of a goal of $20 million to help 5,000 low-income families buy homes, should be duplicated throughout the Bay Area.

"We've only begun to do what we need to do,'' Agnos said.

The educational system will also be strained, with the pressure to accommodate and teach new students exacerbated by a shortage in the state's school budget, difficulty in getting voters to approve school bond measures by the two-thirds vote required by law, and by demographic factors, the report found.

Nearly one-third of the state's teachers are nearing retirement age, the report showed. In Silicon Valley, one in five students from kindergarten through 12th grade has limited proficiency in English.

Panelist Delaine Eastin, state superintendent of public instruction, said businesses can help schools by advocating for higher educational standards and up-to-date textbooks and library books.

She said school districts also need to be able to raise money from voters through bond measures that do not require a two-thirds vote, but a simple majority for approval.

"Why do we fix roads with a simple majority vote but not schools?'' she said.

But few of the solutions discussed yesterday broke new ground.

There were calls for more light rail lines and additional cars for commuter rail lines, higher-density housing close to public transit, and more public-private partnerships to give teachers, students and business leaders a chance to interact at work and school.

However, one attendee, Salvador Sandoval, a business development specialist for the state Trade and Commerce Agency, said he was intrigued by one panelist's remarks describing programs by the American Electronics Association to bring high-tech CEOs into schools to teach for a day, and the creation of science clubs for schoolchildren and high-tech workers.

"Everybody in the Valley pretty much knows there's a problem -- it's coming up with viable solutions that's important,'' he said.

Panelist Gary Fazzino, mayor of Palo Alto and a government affairs executive for Hewlett-Packard Co., said that in the end, there may be only so much growth the Bay Area can take.

"I'm in support of increased housing density, transportation systems and creating urban villages, but I would not take the position of filling every nook and cranny with housing,'' he said. ``This area has a limited carrying capacity.''

©2000 San Francisco Chronicle   Page A1