Experts See Area Growth Cooling

Despite a national recession, Ventura County’s economy will continue to grow in 2002, though at a pace much slower than the robust expansion of a couple of years ago and despite a housing shortage that could curb business movement into the county, analysts predicted Thursday.

“[This year] will seem like a recession following the incredible expansion years of 1999 and 2000,” economist Mark Schniepp, director of the California Economic Forecast, said at his annual Real Estate and Economic Outlook Conference in Westlake.

Speaking to 240 local business and government officials, Schniepp described a balanced, resilient Ventura County economy that has taken only a small hit from the national recession and one that should rebound by summer and be humming along by year’s end.

But lurking behind Schniepp’s optimistic forecast is a housing shortage that is only getting worse.

“The longer-term outlook for the Ventura County economy is generally positive,” Schniepp wrote in a summary report.

“But the shadow of the housing crisis will ultimately impact the ability of the business sector to remain vibrant and dynamic due to a shortage of affordable homes for the work force.”

Schniepp stressed that the largest unknown facing the local economy is when or whether businesses will stop moving to Ventura County because workers can’t afford a place to live and would have to commute from cheaper locales, such as the San Fernando Valley.

“We may see more defections like Kinko’s,” he said in an interview, referring to the Ventura-based copying company that is moving to Texas. “And companies that really have to grow are going to think twice about moving here. They’re going to look to Texas, Georgia, Nevada and to even other California counties.”

William Fulton, a planner who writes books and publishes an industry newsletter, also stressed the need for housing policies that require better use of the remaining land within urban boundaries drawn by a series of local anti-sprawl initiatives since 1995.

Unless officials change development practices, Fulton said some Ventura County cities will run out of space for apartments and houses this decade--long before the Save Open Space and Agricultural Resources initiatives expire about 2020.

Fulton noted that backers of the SOAR measures said there was enough vacant land within cities to build 60,000 residences, but that a study by his Ventura research group found planning guidelines allow a maximum of just 41,000 units. Further study of 126 housing projects in nine local cities determined only about 50% of the allowable units were being built.

Noteworthy, he said, was that the cut in the number of dwellings was not forced on developers by city councils, but instead proposed by developers after discussions with city planners on what was politically acceptable.

“These [densities] were not getting knocked down during the public approval process,” Fulton told the builders, brokers and developers in the audience. “The developer was coming in with a plan already knocked down.”

To provide homes for more people, Fulton said, cities should change development plans and city zoning to allow more dwellings per acre, while rezoning farmland within city boundaries so it can be converted to housing tracts.

Otherwise, he said, Ventura County can “live with the consequences of being job rich and housing poor.”

Those consequences--the smog and traffic caused by a stream of commuting employees who work here but live elsewhere.

Offering a wider perspective, state Controller Kathleen Connell said California faces a difficult year in 2002, as sagging revenues leave the state budget billions of dollars in deficit and the Enron meltdown affecting the state’s largest employee pension fund.

The California Public Employees’ Retirement System has lost tens of millions of dollars because of investments in Enron and its partner companies.

But Connell said “the monetary downturn we have now is nowhere near the depression we had ... in the early 1990s.” She described the current situation as a “momentary recession” that is already passing. “The recovery is underway,” she said.

Revenues from income taxes lag up to a year behind a turnaround, she said. And, according to her figures, state receipts for January alone were $1.3 billion below projections in the governor’s budget.

County government in particular may be hit hard this summer when shortfalls force sharp reductions in funds that local agencies receive from the state.

“I really am very concerned about the counties in California,” Connell said. “I don’t know how they’re going to be able to pay their bills.”