Economist says housing shortfall is creating a labor shortage limiting Tri-Counties economic growth
Some commercial real estate leaders say we are seeing the impacts of the situation in the form of more building vacancies.
It’s quiet on lower State Street in Santa Barbara. It’s too quiet. Times are tough for what for years was one of the city’s most popular retail, restaurant, and entertainment zones of the city.
Steve Brown is Principal for Radius Commercial Real Estate, which represents a number of properties in Santa Barbara County. Brown said there have been a number of vacancies from the 400 to 1200 block of State Street, an area where there would often be a waiting list for commercial tenants.
"We have a lot of empty storefronts," said Brown. "That's something that's very new to us, for those of us who've been in the business for a very long time."
While some think concerns about a recession might be the issue, a leading Southern California economist said that's not the case. There are a number of factors involved.
Dr. Christopher Thornberg said the biggest problem facing the Tri-Counties economic growth isn’t inflation, or talk of a recession. He said it’s labor. There’s record low unemployment, but the regional economy has been hurt by people leaving for better jobs, and more affordable housing.
"There's X number of housing units in California, we're not building any, and as a result of that, people have to leave," said Thornberg.
He was the keynote speaker at the Radius Real Estate forum Tuesday in Santa Barbara. It looked at the state of economy, how it’s impacting commercial real estate, and by extension the business community as a whole.
Thornberg said the region needs to tackle the long-running housing crisis. And, he said for that to happen people need to get past the
“not in my backyard” attitude that’s existed for decades.
"You will hear we don't have the water, we don't have the land, we don't have the space, that's a lot of NIMBY nonsense," said Thornberg. "NIMBY's don't want to see change."
Michael Probstel is with Navigo Capital Group, an investment company based in Santa Barbara and Berlin. He said as they look at projects, the situation forces him to consider the labor issue, and whether they can attract the necessary talent to the community.
Probstel says he just encountered a real-life example of the disconnect between affordable housing, and businesses the other day.
He was replacing the tires on his car at a Santa Barbara tire shop. When he asked a worker if it was safe to park the car outside, the worker told him he didn't know, because he lives in Camarillo. The worker told him he can't afford to live in Santa Barbara, and is forced to commute.
The issue of more housing is on the front burner for communities through the region, as they face state mandates to get more built.
Economist Thornberg says Santa Barbara County is facing a bumpy economic path, with the county’s labor shortage the biggest issue it’s facing when it comes to economic growth.