Strength in the Numbers
The San Fernando Valley is booming. That’s the encouraging conclusion of the inaugural report issued last week by Cal State Northridge’s San Fernando Valley Economic Research Center--an important new institution concentrating on the region’s very real problems and opportunities. The research center promises to focus on the economic, social and demographic data that so often get wrapped into reports on larger, regional trends.
Although that traditional tendency to lump data together is helpful for big-picture analyses, it’s of little use for business and community leaders trying to make the Valley a better place to live and work. Good, reliable information is the most important weapon in fighting urban decay. A snapshot of the first report’s findings reveals how vibrant the Valley is and how complicated are the factors driving its growth. Consider:
* Nearly 43,000 firms employ 600,000 people from Burbank to Calabasas, Sylmar to Sherman Oaks. Total annual payroll: Nearly $19 billion. Most of those are small companies. Only 2% of Valley firms had more than 100 employees in 1994. Overall private sector employment in the Valley rose 2.9% between the first part of 1996 and the first part of 1997--even as the number of firms dropped slightly. Although unemployment claims rose during the downturn of the early 1990s, they had dropped to pre-recession levels by 1995.
* Entertainment-related industries drove much of the growth since 1990. The Valley accounts for roughly 23% of all motion picture industry spending in California. Roughly 70,000 people earn their living at Valley-based entertainment companies, making it the single largest employment sector. In addition, the entertainment industry draws tourists and other visitors to the Valley--more than 2.1 million of them in 1995 alone. Total spent: $610 million.
* Retail sales at more than 51,000 shops and stores totaled more than $14.3 billion in 1996. The biggest portion--$10.4 billion--comes from the Valley portion of Los Angeles and accounts for nearly 42% of the city’s total taxable sales. And although retail outlets created thousands of new jobs, most tended to pay poorer wages.
* Industrial, office and apartment vacancy rates have generally declined. After the Northridge earthquake, apartment vacancies in the Valley portion of Los Angeles shot up to nearly 18%. By the first part of this year, they were back down to near 6%. In communities such as Sherman Oaks, vacancy rates are below their 20-year averages. Meanwhile, construction appears to be picking up as the number of new permits issued climbs.
* Home sales doubled between 1992 and 1998. At the same time, residential foreclosures have declined since late 1996. Average sales price for a single-family home earlier this year crept above the $250,000 mark for the first time since 1993--good news for homeowners, but not such good news for buyers in the market for the first time.
* Even as the Valley booms, many are not sharing in the gains. U.S. Census data compiled by the center show considerable variation from community to community. In Hidden Hills and Calabasas, for instance, per capita income is six times what it is in Pacoima, where 12.4% of residents are on public assistance and 67% of adults did not finish high school. Home ownership rates vary widely, from just 28% in Valley Village to 85% in West Hills.
Yes, the Valley is booming. But booms end. That cycle of fabulous growth and painful contraction is part of the history of Southern California--a place that has always attracted its share of dreamers and gamblers. The Valley in particular enjoys a well-deserved reputation as the kind of place to chase a dream--whether it’s on a quiet suburban street or in the fast lane to fame and fortune.
Keeping that image alive--and, indeed, making it more than just an image--demands hard work and attention. The creation of CSUN’s San Fernando Valley Economic Research Center is just the latest in a positive string of developments in that direction. Groups such as the Economic Alliance of the San Fernando Valley make the Valley better by defining it as a unique place with its own talents and foibles.
Despite talk last week that the CSUN study supports the claims of secessionists seeking to break the Valley away from Los Angeles, the report actually provides a much-needed neutral perspective. That the Valley is an economic powerhouse has never been in question. But the report shows, for instance, that the city allocates roughly 30% of its budget to the Valley and that Valley businesses pay about 26% of the business tax in Los Angeles. Most important, though, the research illustrates how deeply connected the Valley is to the rest of the region and how complex that beneficial relationship really is.
For years, the Valley has felt like a red-headed stepchild--neglected by downtown, scorned by the Westside. That should change. At a kickoff event for the Economic Research Center last week, business leaders pronounced the Valley to be stronger than ever, luring business back with smart workers. Properly wielded, that kind of economic strength can translate into political strength to preserve the dream that makes the Valley so alluring for so many.
