Multi-Family Housing Key to Monterey Bay Area Success – Monterey Herald

MARINA — The Monterey Bay Economic Partnership’s eighth annual virtual economic outlook event featured guest speaker economist Christopher Thornberg, who said housing is the solution to the labor shortage on the Central Coast.

There are “not enough workers to meet all of the competing demands,” Thornberg said. “The solution to that is housing and, let me be blunt, it’s multi-family housing, … it’s apartment buildings, you have to build them, that’s the key to success for the area.”

Thornberg is the founder of Beacon Economics, a respected research organization in California serving public and private sector clients across the United States. He is Chairman of the Economic Advisory Council of the California Chamber of Commerce and specializes in economic and revenue forecasting. , and labor and housing markets.

Thornberg’s presentation at the May 20 event was titled “The New Post-Covid World Order: In Brief and In Depth…What Does It Mean for Monterey Bay?” His speech focused on data-driven economic analysis and said unemployment rates on the Central Coast — Monterey, Santa Cruz and San Luis Obispo counties — are at some of the lowest levels ever. But the problem is that the jobs cannot be filled.

The unemployment rate in the United States in April was 3.6%, in California 4.6%, 5.8% in Monterey County, 4.5% in Santa Cruz County and 2 .4% in San Luis Obispo County.

“You can’t have an economy that is still recovering and incredibly tight labor markets. It doesn’t quite work that way,” Thornberg said. “But labor shortages are a serious problem and they will get worse. The solution is simple, … housing, housing and housing.

Local economic development will necessarily shift from a focus on jobs to workers. That’s mostly true in the Monterey Bay area, which has basically recovered but is now largely suffering from a lack of locally available labor, he said. Making capital investments, providing job training and increasing participation rates among women and older people can help increase the workforce.

Thornberg said there is a gap between what is being said in the media and the objective analysis of real data, which shows that overall household net worth has increased over the past two years. From 2019 to 2021, it increased by 28.3%, representing the largest increase in household net worth since the period before the Great Recession. The median net worth of the bottom 50% of households in the United States grew more than that of the top half of households.

“We’re clearly heading in the right direction,” he said, “which, again, is probably a surprise to you who say you thought the economy wasn’t recovering.”

Americans’ financial obligation ratio — the percentage of household income spent on current debt, credit cards and mortgages — is 14%, according to Thornberg, which is historically low.

“We are not drowning in debt,” he said. “Rather the other way around. It doesn’t look like a bad economy.

Consumer spending was hit at the start of the pandemic, but recovered significantly in mid-2021, with spending habits shifting from travel, dining and paying for services to consumer appetite for things like bicycles, interior and exterior decoration. furniture. For a six-month period, spending on durable goods was 25% above normal, Thornberg said.

The bottom line, he said, was that after more than two years of the COVID-19 pandemic, a faster-than-normal recovery was certain. But the narrative has led to fiscal and monetary policy reactions that have been and continue to be excessive. The economy is overheating with inflation and the federal budget deficit adding to the risk, Thornberg said.

The long term, he said, is that there are no economic “new normals” from the pandemic, but it has accelerated underlying trends that were already in place, with implications for the economy. land use, retail, housing and debt.

Tahra Goraya, president and CEO of Monterey Bay Economic Partnership, said the nonprofit appreciated Thornberg’s presentation of data that further illustrated and confirmed what Monterey Bay Economic Partnership has long known, that the production of housing of all kinds at all income levels is essential to the economic success of the region.

“Regardless of our political beliefs, until all of us – including policymakers and employers – focus on the basic needs of workers, such as safe, fair, affordable and equitable housing, we will be unable to meet the demands desperate from our various industrial sectors. for work,” Goraya said. “This is our reality in the Monterey Bay Area and we need to be creative, thoughtful and intentional when it comes to housing.”

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