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FOR IMMEDIATE RELEASE
June 27, 2007
Contacts: Marcus Ginnaty (949) 583-2616 office (949) 439-3864 mobile
Kate Mossbarger (949) 583-2619 office (949) 637-9205 mobile
Orange County Business Council Debuts Workforce Housing Scorecard
First-of-its-kind study examines and ranks cities’ efforts to meet need for housing
(Irvine, CA) – The Orange County Business Council – with major sponsor Bank of America – today released the findings of the organization’s first-ever Workforce Housing Scorecard, a comprehensive evaluation of the current and future state of Orange County’s housing supply and demand. The exhaustive study, which will be conducted bi-annually, examines the past, present and future of Orange County housing by thoroughly analyzing homes constructed, currently available, and being planned in the county’s 34 cities from 1991-2030. According to Orange County business executives, the cost of housing poses the biggest threat to the county’s continued prosperity and quality of life. “We commissioned this study because housing is one of the most critical factors affecting Orange County businesses, now and especially in the future,” said Lucy Dunn, CEO of the Orange County Business Council. “This effort is just the first step in our long-term goal to work with Orange County cities in developing tools to ensure an adequate supply of housing for our future workforce.” The county’s top five performing cities in the study are: Irvine Tustin Newport Beach Anaheim Huntington Beach
Orange County Business Council Debuts Workforce Housing Scorecard – Page 2
These five cities rated high because they have generated both new jobs and the necessary supply of homes to house these new workers – now and in the future. “Businesses have been telling us for the last five years that they cannot find enough skilled workers,” said Dunn. “Forecasts estimate we could lose up to 20 percent of our young adults in the next 20 years, mainly due to the lack of entry-level housing. Losing these additional young workers hurts the county’s businesses and threatens our future economic growth. In these cities, housing density patterns are changing to include more high-rise developments, which maximize the number of units per acre of developable land. This is especially important in maturing cities, where the majority of land available for new homes is surrounded by other existing uses (referred to as infill development). “We employed a methodology that analyzes housing from an employer’s perspective,” explained Wallace Walrod, OCBC Vice President who managed the study. “We began with the assertion that the cost of housing is detrimental to the Orange County business environment, and examined this problem from a supply/demand perspective.” The Scorecard addresses the crucial relationship between housing supply, workforce development, affordability and business competitiveness in Orange County. It concludes that if present supply and demand trends continue, the jobs-to-housing ratio in 2030 will be severely unbalanced. As a result, affordability will continue to decline, many more residents will be priced out of the market, and the number of workers commuting into the county for jobs will continue to grow. The study ranks each city in four areas to assess how well each is providing housing for its workforce in light of the robust job growth that has occurred over the past and is expected to continue in the future. The Scorecard is limited to four criteria: 1. Number of jobs – It rewards cities that promote job growth 2. Housing unit density – It rewards cities with inclusive housing policies and penalizes cities that are less hospitable
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3. Housing growth – It rewards cities that promote housing growth 4. Jobs to housing ratio – It rewards cities for past balanced jobs/housing growth, in addition to their plans for the future Between 1991 and 2005, Orange County created 345,000 new jobs and built 158,000 new housing units – or 2.2 jobs were created for every home built. A jobs to housing ratio of 1.5 is considered optimum to maintain a healthy economy and provide adequate housing supply for its workers. In 1991, OC’s jobs to housing ratio was 1.4, which indicates an adequate supply of housing. In 2005, the ratio rose to 1.61, reflecting robust job creation and a lagging housing supply. The OCBC Scorecard study projects a jobs-to-housing ratio in 2030 of 1.79, which underscores the declining supply of homes for the workers who will continue to be needed to fill the growing number of jobs. The OCBC Housing Scorecard attributes housing scarcity to regulatory obstacles, such as high housing permit fees, strong anti-development activism as part of the California Environmental Quality Act process, and restrictive infill zoning. Who can afford to live here? The OCBC Workforce Housing Scorecard report also studies the issue of housing affordability. Orange County is the fourth most expensive place to live in the country, which is causing an exodus of 25-44 year olds in search of homes they can afford. “Forecasts estimate we could lose up to 20 percent of our young adults in the next 20 years, mainly due to the lack of entry-level housing,” said Dunn. “Losing these young workers hurts the county’s businesses and threatens our future economic growth.” According to the Scorecard report, factors affecting affordability of homes include supply constraints, fees/regulations, growth controls/NIMBYism, and the preference for building retail (a large tax contributor) over housing. What are the solutions? This Workforce Housing Scorecard is a starting point to foster a broad and sustained dialogue on long-term housing supply affordability.
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To support cities’ housing plans, the Business Council will release an “American Dream Toolkit” later this year with examples of successful affordable housing programs and policies, reports and studies related to housing affordability, as well as potential legislation necessary to address some of the existing barriers to increasing housing supply. Following the release of the Scorecard and the creation of the Toolkit, OCBC will roll out additional resources and initiatives including: Feasibility analysis of infill opportunities at the city level Analysis of housing unit reductions during approval processes Housing conference for newly elected city officials (Housing 101) State legislation to increase incentives and remove barriers Second edition of Workforce Housing Scorecard in two years OCBC’s Workforce Housing Scorecard and the organization’s long-term commitment to this issue are part of a larger movement aimed at increasing the supply and affordability of housing, two elements critical to ensuring Orange County’s long-term prosperity.
The Orange County Business Council is the leading business organization in Orange County, California. OCBC is a private-sector alliance of companies and public-sector partners that represents hundreds of local enterprises from small business to multi-national companies. OCBC provides the forum for businesses to join together, often in conjunction with government and educational institutions, to invest in the growth and prosperity of the fifth largest county in America. For more information on OCBC, visit www.ocbc.org.
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