Orange County's Housing Crisis
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Transcript of Orange County's Housing Crisis
OC’s Housing Crisis is also an economic, social and
demographic one
Presentation by Joel Kotkin, Roger Hobbs Presidential Fellow in Urban Futures Chapman University to
Orange County Housing Summit, September 28, 2017
Issues related to Housing
• Housing prices too high relative to incomes
• Millennials and 30 somethings are not staying here
• A rapidly aging population that lacks alternatives
• Growing homelessness, and high levels of poverty
• OC needs a new housing vision
0 2 4 6 8 10
New York MSA
Chicago MSA
Austin MSA
Dallas-Fort Worth MSA
Houston MSA
San Jose MSA
San Francisco MSA
Riverside San Bernardino MSA
Los Angeles County
Orange County
California
United States
Median Multiple (House Price/Household Income)
OC Housing Affordability: 3rd Lowest In U.S. ORANGE COUNTY IN CONTEXT
Estimated from Census Bureau, California Assoc. of Realtors & Demographia data
Practical factors would most likely remove an area from consideration; housing is most impactful, recreational factors carry less weight in a moving decision.
4
1 Q14: Which of the following would REMOVE a metro area from consideration as a destination for you if the metro did not meet your needs in this category?
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Cost of housing was the #1 factor to remove an area from consideration, but this challenge is not unique to Orange County
Characteristics that eliminate metro from considerationNational n = 1,191 / Orange County n = 104
- OC resident- National respondent
The Slow Erosion of OC Tech Base: Fewer Tech Jobs Today than in 1990
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
1990 1995 2000 2005 2010 2014
Total Tech Industry Employment in Orange County - Selected Years, 1990-2014
Source: US Census Bureau data
49.2 49.2 49.148.1
45.5 45.1 44.9 44.4 44.242.2 42.1 42 41.9 41.3 41.2 40.7 40.5 39.6 38.9 38.4 38.3 38.3
37.2 37.236 35.7 35.7 35.2 34.6 34.1 33.9 33.8 33.5 33.2 32.8
0
10
20
30
40
50
60
Individuals Earning $75,000+, As Percentage of PopulationTop 35 Counties, 2015
Source: U.S. Census
96.9293.89
90.70 89.81
78.2376.06
74.13 73.45 73.15 72.5070.83 70.00
67.96 66.4564.89
62.96 62.3860.39 59.34 58.67 58.20
43.90 42.86 41.43 40.91
29.50
0.00
20.00
40.00
60.00
80.00
100.00
120.00
Top 20 Largest Percent Growth in $75,000+ Incomes By County, Plus Selected West Coast Counties2006-2015
-400,000 -300,000 -200,000 -100,000 0 100,000 200,000 300,000 400,000
Seattle MSA
San Jose MSA
San Francisco MSA
Riverside San Bernardino MSA
Phoenix MSA
Nashville MSA
Denver MSA
Dallas-Fort Worth MSA
Charlotte MSA
Austin MSA
Orange Co.
Los Angeles Co.
Census Bureau data
Net Domestic Migration: 2010-2016ORANGE COUNTY & SELECTED MSA’S
24.0 28.3
41.5
56.9
77.7 79.4 88.3
100.3
Personal & Home Care
Aide
Retail Salesperson
Construction Laborer
Carpenter Elementary School Teacher
Computer Programmer
Nurse (RN) Biomedical Engineer
Even High-Wage Workers Cannot Afford Housing9
Orange County Wages v. Qualifying Income
($000s)
ORANGE COUNTYTO QUALIFY: $117.5K
Growth in Educated Population Not Keeping Pace
10
6966
47 47
39 37
2318
Inland Empire
Austin New York Texas Chicago LosAngeles
Silicon Valley
Orange County
2000 – 2014 Bachelor’s or Graduate Degree Holders Growth Age 25-34(000s)
-3.6
3.0
0.1
-43.0
-11.0
-1.0
-5.5
-5.7
1.3
-1.6
-4.7
-2.6
-7.1
-4.1
1.1
2.0
Total:
1 to 4 years
5 to 17 years
18 and 19 years
20 to 24 years
25 to 29 years
30 to 34 years
35 to 39 years
40 to 44 years
45 to 49 years
50 to 54 years
55 to 59 years
60 to 64 years
65 to 69 years
70 to 74 years
75 years and over
Orange County Net Domestic Migration Rates By Age, 2011-2015
Source: U.S. Census Bureau, 2011-2015 American Community Survey 5-Year Estimates
-20,000
-10,000
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
0-25 26-34 35-44 45-54 55-64 65+
Ne
t D
om
est
ic M
igra
tio
nCalifornia
Texas
Net Domestic Migration by AgeCALIFORNIA AND TEXAS: 2013-2014
Derived from Internal Revenue Service data
International Migration Is Growing In Orange County
13
0% 1% 2% 3% 4% 5% 6%
United States
Seattle MSA
San Jose MSA
San Francisco MSA
Riverside San Bernardino…
Phoenix MSA
Nashville MSA
Denver MSA
Dallas-Fort Worth MSA
Charlotte MSA
Austin MSA
Orange Co.
Los Angeles Co.
As a % of 2010 Population
Net International Migration Rate: 2010-2016ORANGE COUNTY & SELECTED MSA’S
-10% 0% 10% 20% 30% 40% 50%
United States
Seattle MSA
San Jose MSA
San Francisco MSA
Riverside-San Bernardino MSA
Phoenix MSA
Nashville MSA
Denver MSA
Dallas-Fort Worth MSA
Charlotte MSA
Austin MSA
Orange Co.
Los Angeles Co.
Age 35-49 Growth Orange Co. Compared SELECTED AREAS & US TREND: 2000-2015
Census Bureau data
Generation X
Age in 2015
OC Is Losing GenX’ers Compared To Other Key Areas
-20% -10% 0% 10% 20% 30% 40% 50% 60%
United States
Seattle MSA
San Jose MSA
San Francisco MSA
Riverside-San Bernardino MSA
Phoenix MSA
Nashville MSA
Denver MSA
Dallas-Fort Worth MSA
Charlotte MSA
Austin MSA
Orange Co.
Los Angeles Co.
Census Bureau data
Age 0-17 Growth: All EthnicitiesORANGE COUNTY & US TREND: 2000-2015
The Number of Children Is Declining Compared To Key Areas
0.00 0.10 0.20 0.30 0.40 0.50
Orange Co.
San Diego MSA
San Jose MSA
San Francisco MSA
Los Angeles Co.
Sacramento MSA
Riverside-San Bernardino MSA
Stockton MSA
Fresno MSA
Bakersfield MSA
Coastal MSAs & Counties
Interior MSAs & Counties
CALIFORNIA
U. S. OUTSIDE CALIFORNIA
Age 65+ as a Ratio of 15-64
2040
2015
Old Age Dependency Ratio: 2015 & 2040CALIFORNIA METROPOLITAN AREAS >1M IN 2040
Figure 16Derived from California Department of Finance projections
0% 5% 10% 15% 20% 25%
Stockton MSA
San Jose MSA (Santa Clara Co. Only)
San Francisco MSA
San Diego Co.
Sacramento MSA
Riverside-San Bernardino MSA
Oxnard MSA
Modesto MSA
Los Angeles MSA
Fresno MSA
Bakersfield MSA
Orange Co.
California (2014)
Calculated from California Poverty Measure data (Stanford University)
Cost of Living Adjusted Poverty RateORANGE COUNTY & SELECTED MSA’S: 2012-2014 AVERAGE
Data available
only for
California
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
Single-Family Multi-Family
Rat
e p
er
1,0
00
Po
pu
lati
on
San Bernardino Co.
Los Angeles Co.
Orange Co.
California
Texas
United States
New Houses: Building Permits Growing At Half U.S. Rate2014 BY TYPE
Source: US Census Bureau data
For OC respondents, good weather, professional opportunities, and familial affiliations keep them in the area.
19
0%
5%
10%
15%
20%
25%
Good Weather Job / Good WorkOpportunities
Close to Family or Friends Raised in the area Already live in OrangeCounty
Fun Things to Do /Entertainment
1Q28. Why did you choose to live in Orange County?
- OC respondent
Top 6 Reasons why OC respondents live in OCOrange County n = 104
0
1
2
3
4
5
6
7
8
Co
mp
are
d t
o D
eta
che
d (
5)
Construction Cost/Square Foot Compared to Detached (5 per Acre)
Construction Cost by House TypeSAN FRANCISCO BAY AREA
Figure 20Derived from FBI Statistics: 2013, Major metropolitan areas (average).
Building a Future in OC
• New Housing needs to be found both in OC and IE
• Density is no replacement for single family homes people prefer
• More efforts needed to nurture tech, professional and arts employment in county
• Skills training needed for large working class population
• Leaving people behind suggests problems to come