Poverty, Homelessness, and Commercial Real Estate

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Well. This is a tough column for me to write! But one that’s direly needed as the wealth disparity of our county has widened drastically since Orange County became our home in 1988.

The Southern California News Group in conjunction with the SoCal Policy Forum hosted a panel discussion last evening to bring awareness to the issues of poverty and homelessness. Moderating the discussion was Todd Harmonson, Orange County Register Senior Editor. On the dais were four voices of diverse perspectives - Joel Kotkin, a Fellow in Urban Studies at Chapman University; Shelley Hoss, President and CEO of the Orange County Community Foundation; Mary Anne Foo, Founder and Director of the Orange County Asian and Pacific Islander Community Alliance; and Lucy Dunn, CEO of the Orange County Business Council.

Once the orange grove studded bedroom community of Los Angeles - Orange County has sprawled to be 34 disparate cities with a population elevating us to the fourth largest in the United States if counted collectively. No longer are we the Los Angeles employment feeder to the aerospace, textiles, and entertainment industry. The Orange County economy is robust - boasting one of the lowest unemployment percentages in the nation coupled with one of the highest median annual incomes - $89,759. We lead the country in medical device manufacturing, real estate related jobs, construction, and finance. So where’s the issue?

The unemployment numbers are misleading. According to Professor Kotkin, roughly 8 of 10 new jobs created in California since 2010 have been below the median income level of the county. 4 in 10 are below $40,000 annually. These incomes make it difficult to survive as an income of roughly $66,000 is needed to afford the $1800 per month average rent for a two bedroom apartment in the county. Underemployment is rampant as well says Lucy Dunn. A Disneyland ride operator serves as a great job for a high school student learning their chops. Not so much for a head of household supporting a family.

We’ve done a poor job educating our youth. Most of my practice centers around family owned and operated manufacturing and logistics businesses. Ask any of them what their biggest concern is - the lack of skilled employees. Welders, CNC machine operators, and equipment repair technicians are in short supply. Our high schools and community colleges have taken a dim view on vocational training. Look. A four year degree is awesome! But, it’s not for everyone. Especially if it means beginning your career saddled with a load of student debt to service and the inability to find a well paying job. Starling numbers of our educated youth are bailing for progressive states such as Texas, Tennessee, and North Carolina. Sure. The weather is brutal. But, you can enjoy an affordable family home.

Housing starts have woefully lagged employment growth. Lucy Dunn, formerly the Director of the California Department of Housing and Community Development, outlined the metrics. Until recently, our state has added approximately 500,000 new residents each year since 1950. Our need for new housing annually? 200,000 units. We’ve not achieved this since 1989! It doesn’t take a doctorate in economics to realize that’s a huge disparity in supply and demand. Consequently, our median price for a family home has eclipsed $720,000 and average rent for an apartment - $1800 per month.

Our state has not been our friend. I could write an entire column on this subject - maybe I will someday. Suffice it to say - burdensome regulation, crippling taxes, anti growth policies, job killing attitudes, unsustainable public employee pensions, ALL have contributed to the pickle in which we find ourselves.

Is there hope? OF COURSE! We are one the most innovative and entrepreneurial counties in the world. Shelley Hoss pointed out most of the wealth in Orange County is first generation - unlike the East Coast with its seven or eight generations. Additionally, most of our wealth was created here and by folks who benefitted from public education, a scholarship from the Cal State or UC system, or public assistance. Many of our wealthy benefactors emerged from poverty to their current prominence. We are a generous community!

Bravo to the Southern California News Group and SoCal Policy Forum for bringing awareness to our issues and generating a platform from which to converse! 

Allen C. Buchanan, SIOR, is a principal with Lee & Associates Commercial Real Estate Services in Orange. He can be reached at abuchanan@lee-associates.com or 714.564.7104. His website is allencbuchanan.blogspot.com.