A Dire Economic Warning

New statistics paint a rosy picture of an economically healthy Orange County, where incomes far exceed the national average and growth continues to be a way of life. The Census Bureau reports that the county has had the eighth largest numerical increase in population in the nation since 1980.

The county’s median family income rose 3.4% just during the last year, putting it at $42,960, well above the national median family income of nearly $30,000.

Those are the raw statistics and they support what economists knew all along: Orange County is enjoying strong economic health. But statistics from the California Assn. of Realtors also verify what too many people already knew: Most residents cannot afford a median-priced home in the county and owning a home will continue to be out of reach for more and more people in the future.

According to the Realtors, whose report is similar to a recent finding by Chapman College’s economic research center, the median-priced home in the county is beyond the economic reach of 70% of residents. The median home price increased 13.1% over last year and income rose only 3.4%, which means that even with declining interest rates, people are losing ground in the home market.

That may seem like good news for those interested in stopping growth, or slowing it down. But it is not good news. The rising home costs are producing a county of expensive residences, with families paying a disproportionate share of their incomes to purchase homes. The higher housing costs are producing too many commuters who work here but live in San Bernardino, Riverside and Los Angeles counties because they can’t afford to buy homes in this county.

Those conditions that breed traffic-choked freeways and surface streets and the resultant air pollution threaten Orange County’s economic health and quality of life. The statistics should be viewed as warning signs for residents and public officials that more must be done immediately to balance the housing market and improve traffic conditions. Failure to do so could lead to economic and environmental decline.

Business firms rely on the county labor market. If it deteriorates, they may expand elsewhere or move out of the county entirely. Other companies may bypass Orange County for new labor markets, like San Bernardino and Riverside counties where labor is plentiful and housing costs and commuting are much more affordable and acceptable.

For too many workers the unpleasant choice today is either high housing costs or high commuting costs. That puts employers under pressure to pay higher wages, while still suffering from the tardiness, absenteeism and higher rate of turnover that generally accompanies heavy commuting.

In the long run, the county loses a lot in the quality of life when it becomes an area of expensive homes and lots of commuters who can’t afford to live in them.