Commentary : Sharp Decline in Pessimism Marks a New Annual Survey of County

Orange County is at a very important crossroad, one that will set the course of the county for the rest of this century.

After 3 years of deteriorating views of the future, we find in our just-released seventh Orange County Annual Survey that residents’ outlooks improved in 1988. This year’s survey shows that only 38% now think the county will be a worse place to live in the future, a 16-point drop from the 54% majority with a negative outlook in the 1987 annual survey. The sharp decline in pessimism is the biggest 1-year change we have seen since we began the annual survey of 1,000 adult residents in 1982.

This change of view stems from a promise of improvements residents saw in many of the events of 1988. But if these promises prove to be false, county spirits could go into another tailspin.

The biggest factor in rebounding confidence, we find, is a shift among the large segment of the public who see traffic as the No. 1 issue in Orange County. In a year, this group moved from extreme pessimism to mild optimism about the future of the county. This brightened outlook comes in spite of the fact that ratings of Orange County traffic hit an all-time low in 1988. Only 5% of residents now say they are satisfied with the freeways.

Why the new-found optimism among those concerned about traffic? Many signs around the county are giving the appearance that help is on the way. Commuters are now seeing construction work along Orange County’s clogged arteries. And more than ever, they hear talk of new toll roads and other major road projects.

In 1989, local residents will take another look at these improvements to see if they will really provide relief. But if this promise of congestion relief proves to be a mirage, public confidence surely will erode again.

This year was a big one for politics, with presidential candidates from both parties expending considerable energy on Orange County. In the end, Ronald Reagan was the big winner, with his vice president receiving more than two-thirds of the vote and two of his White House aides becoming new members of the county’s congressional delegation.

This political outcome also boosted local optimism. In Orange County, where the outgoing President enjoys immense popularity, George Bush is seen as a sort of Reagan reincarnation. Moreover, the president-elect’s politics are more toward the middle of the political spectrum, very much in line with the “somewhat conservative” profile of county voters.

But the honeymoon with residents may end early in 1989, if the new President fails to keep his promise of no new taxes. And a rude awakening to the end of the Reagan era would indeed prove dampening to county spirits.

As for the local economy, 1988 was a mixed year. While the county survived the market crash of October, 1987, the ensuing year provided less-than-outstanding growth in local incomes. The 1988 median income marked a new high of $44,000 per household--but this represented only a 5% gain over the previous year. This puts income growth at about the same as the inflation rate, meaning for the third year in a row that county households have seen only skimpy financial gains. The dramatic increases of the first half of the decade appear to be over for now.

This weakening economic performance is another threat to the new-found optimism about life in Orange County. In our series of consumer-confidence questions, we found a higher-than-usual proportion of residents uncertain about both their own finances and the national economy in the coming year.

Slow growth was a big topic of conversation in 1988, as local groups battled over Measure A. Much heat was generated by the expensive campaign waged over the proposal to tie new development to street improvements. Ultimately, the slow-growth initiative failed by a 56% to 44% margin.

We doubt that the outcome of this bitter campaign generated much confidence in the future. The county’s voters were split on this issue, with south county residents narrowly supporting slow growth and north county residents opposing it. And the issue is far from resolved--in our recent annual survey, residents described current growth policies as too lenient, while supporting slow growth by a wide margin. Without new efforts to resolve differences, we expect this issue to be a divisive one next year and beyond in local elections.

One of the biggest local news events of the year was the dramatic rise in the price of housing. Today, Orange County homes have topped Los Angeles and San Francisco in cost. The annual survey indicated a median housing cost of about $700 per month for renters and homeowners alike. Housing costs continue to rise faster than income growth and the general rate of inflation.

Although homeowners watched their housing appreciate dramatically in 1988, this trend actually did little to improve future optimism. Many residents have begun to worry that future generations will be unable to afford to live in Orange County. This year’s survey found strong support for affordable housing policies and programs.

The annual survey’s findings do not exactly point to a full-blown renaissance of hope. Residents now are evenly divided between a negative and a positive view of the county’s future. Still, the halt to the downward slide gives local officials and civic leaders a new opportunity to chart a better course for the future.