by Mark Schniepp
How is YOUR local economy?
Comparing how the economy is growing across regions of Southern California, I noticed that there is considerable strength in the coastal areas and in the Inland Empire, although the increase jobs created has moderated over the last couple of months.
Nevertheless, unemployment rates are at full employment in Orange, San Diego, and Santa Barbara Counties, and close to full in Ventura and the Inland Empire Counties.
Northern Los Angeles County has demonstrated considerable improvement this year, mostly in the Santa Clarita Valley. And the Antelope Valley economy has evolved over the last two years with more job growth and rebounding home prices.
Ventura County Star, November 6, 2015, Page 8A
Recently, I gave a presentation at a Camarillo Chamber of Commerce meeting where I reported on the lagging progress of the Ventura County economy.
But the Ventura County economy is lagging other counties in California including Santa Barbara County. Lining up the counties in a comparison of a number of economic indicators such as office vacancy rates, job growth, new housing, new commercial and industrial investment, wage growth, home prices, and apartment vacancy rates, the conditions in Ventura County have not progressed like other areas.
Job Growth and Office Vacancy
Job growth (from September 2014 to September 2015) and the Office vacancy rate (as of September 30, 2015) by County:
|County||Job Growth (%)||Office Vacancy (%)|
|Santa Clarita Valley||3.7||13.3|
So why is Ventura County lagging other counties in the key economic indicators? In part, the answer includes the regulatory environment in the County. We believe there has been a stifling of new development of housing and that has pushed home prices and average rents higher, and vacancy rates for rental housing substantially lower, limiting housing affordability and availability for prospective employers.
Housing and Traffic
High home prices and extraordinarily tight rental vacancy is a clear symptom of demand exceeding supply for housing. It’s true in many areas of California, especially along the coast and in Silicon Valley. The lack of housing has ramped up traffic problems in many areas of California.
Job growth is suffering. Commuting continues to increase. More residents of Ventura County are working in Los Angeles or Santa Barbara Counties, and this is creating more traffic and frustration all along the 101, and particularly in some of the region’s principal corridors:
Ventura to Santa Barbara
• 101 NB: Muscle Shoals to Garden Street, Santa Barbara, 7 to 9 AM
Santa Barbara to Ventura
• 101 SB: Milpas Street to Muscle Shoals, 4 to 6 PM
• 101 SB: La Cumbre Road to Downtown exits
Oxnard to Camarillo
• 101 EB: Vineyard Avenue to Carmen Drive
• 101 NB: Westlake Blvd to the 23 freeway
• 101 EB: top of Conejo Grade to the 23 freeway
• 23 NB: 101 North to Olsen Road (PM)
• 23 SB: Olsen Road to 101 North (AM)
Home prices in Ventura County are second to Orange County in highest median value among all Southern California Counties. Rental prices are third highest, in back of Los Angeles and Orange County, but the vacancy rate for apartments is the tightest in the region (tying Santa Barbara).
The lack of housing is one of the principal problems affecting Southern Santa Barbara, Ventura, and many parts of Los Angeles and Orange Counties. But what sets Ventura County apart is the relatively high rate of business downsizing and defection, combined with the absence of new business relocation there. It appears that businesses have decidedly chosen other areas to relocate to than Ventura County.
Meanwhile, job growth is humming along in the Bay Area economies, in Orange County, and Los Angeles County, including the Santa Clarita Valley region of Northern LA County. Population growth is ramping up again in the Inland Empire and in the Sacramento Valley region. More new development projects are underway or scheduled to begin in the Bay Area, in Central California, in Orange and San Diego Counties and in the Inland Empire.
We should see more new housing under construction next year and more general growth in the regional economies because of it. However, the lagging status of the Ventura County economy is likely to persist until employment growth increases and more housing projects are started and built. How will this happen? A loosening of the regulatory environment and greater economic development efforts by the cities is a first step toward creating greater vibrancy in Ventura County.
The Entrepreneur Economic Forecast Conference in Ventura County
February 5, 2016
The California Economic Forecast is an economic consulting firm that produces commentary and analysis on the U.S. and California economies. The firm specializes in economic forecasts and economic impact studies, and is available to make timely, compelling, informative and entertaining economic presentations to large or small groups.