Do you know an outstanding leader in our community? Please nominate them today!
Nomination form link Link
Do you know an outstanding leader in our community? Please nominate them today!
Nomination form link Link
While there has been a decline in women in the workforce, Morgan Stanley predicts that will soon change. Morgan Stanley reports in Millennials, Gen Z and the Coming “Youth Boom” Economy (Link), that “as Gen Z joins Gen Y in the workforce, the two cohorts could deliver a sizable jolt to U.S. GDP, consumption, wages, and housing—and put the U.S. well ahead of its G10 peers.”
It’s well-known that Generation Y, often called the Millennials, will overtake Baby Boomers as the largest cohort in the U.S. this year. Less discussed, but arguably more important: Gen Z, born between 1997 and 2012, will overtake Gen Y as the country’s largest cohort by 2034, ultimately peaking at 78 million. As Gens Y and Z combine in the workforce, these two outsized generations could power higher consumption, wages and housing demand, all pillars of GDP growth.
For the U.S. economy, the demographic tailwinds created by these high-population cohorts could be significant, delivering the kind of “youth jolt” that the Baby Boomers were famous for. However, according to a recent report from Morgan Stanley Research, the implications of these demographic shifts aren’t baked into current Congressional Budget Office forecasts, in particular, the projections for labor-force growth.
Work by the firm’s economic team, along with an in-depth survey of Generation Y and Z consumers, uncovered a significantly brighter outlook for the U.S. in the coming decades than previously thought. As Gens Y and Z combine in the workforce, these two outsized generations could power higher consumption, wages and housing demand, all pillars of GDP growth.
In addition, these new projections on labor-force growth could also mean a rosier outlook for Social Security and Medicare solvency, offering investors an overall bullish view for the U.S. between the 2020s and 2040s—and policymakers a different perspective on the road ahead.
As the North Bay continues to rebuild following the devastating 2017 fires, the Bay Area Council recently led a group of real estate developers and investors on a tour of potential development sites in the Santa Rosa area. The Council partnered with Bay Area Housing Advocacy Coalition on the tour, which attracted almost 60 developers and investors. Cynthia Murray, CEO, North Bay Leadership Council, provided an economic snapshot of Sonoma County and Santa Rosa, in particular, to the attendees and participated in the tour.
The tour included meetings with Santa Rosa Mayor Tom Schwedhelm, Council member Chris Rogers, Supervisor David Rabbitt, Director of Planning and Economic Development David Guhin and other city planning and economic development officials. The group visited sites that would be eligible for various incentives as part of Santa Rosa’s strategy to promote more fire resilient patterns of growth by encouraging development of prime sites in transit-served urban centers in the downtown Opportunity Zone. The Council led a similar tour in Oakland several years ago that helped spark a wave of new investment and building that has continued to expand.
The North Bay tour also comes as the Bay Area Council Economic Institute works with leaders to provide policy analysis and recommendations to help guide rebuilding efforts. A key part of the work is ensuring that these counties maintain a vibrant economic environment, especially for small locally-owned businesses. A Profile of Sonoma County: Building a Resilient and Inclusive Economy will be released in October on the second anniversary of the fires. The report will highlight various policy goals and indicators for tracking progress on fire safety, emergency response, housing affordability, economic and ethnic inclusion, and public health.
As we end February, current events make it evident that the year ahead will be filled with turbulence, change and challenge. In this issue, we tackle one of the most compelling challenges, not just of 2019, but of this century: climate change and how we prepare and adapt for all that it promises to impact in our lives, economy and environment. We are getting more data from scientists that action needs to be taken now as the accelerated timeline requires our urgent attention. Please read this issue for a deep dive into what we know, what we can do now and going forward, and the need to build strong coalitions to make change happen to minimize the damage of inaction.
Climate change adaption can be a unifying force to bring all the factors that matter into a collective response. We need to look with a new lens that provides a cohesive, integrated approach to ensure that what matters lasts and thrives. New construction, infrastructure improvements, the future of work, healthcare, equity, energy and emergency preparedness all must be guided by the imperative of addressing climate change.
NBLC looks forward to being a part of that coalition and working together to ensure the future prosperity and resiliency of the North Bay!
To read our most recent newsletter on climate change go here: Link
It will be the best of times; it will be the worst of times (apologies to Charles Dickens).
In 2019, we can expect a worsening housing crisis as construction fails to keep up with demand, shrinking labor pool, lengthening commutes, economic slowdown and accelerating climate change. But we can also expect our new governor and state legislature to make progress on providing more children with preschool, enacting new laws that make building housing less onerous bringing back some form of redevelopment, and doing more to fight climate change and disaster preparedness.
Also on the plus side, the baby boomers are finally moving out of the way of the millennials’ taking over the leadership roles, and Gen Z is rising, which should lead to more diversity in the workforce, an increase in working remotely and greater practice of corporate social responsibility.
Changes in permitting at the city of Santa Rosa and county of Sonoma will also help keep the builders moving forward with new construction as the improvements in timing and costs become more manageable. While interest-rate increases are expected to occur, the pent-up demand for homes should still have a significant number of buyers who qualify to purchase, especially if wages increase due to the tight labor market.
Employers are also stepping up to provide more housing benefits to their employees. The purchase of a new apartment building by Sonoma State University bodes well for modelling what other employers need to do: invest in housing for their employees. With top talent in short supply, the best way to attract and retain the workforce is to remove the high cost of housing from being a barrier to employment.
Many other major employers are looking at building or purchasing housing for their employees which could be a very positive trend for 2019.
In the North Bay, the growing problem with attracting and retaining workers in several industries, is exacerbated by the lack of affordable housing for lower wage employees. Hard hit is the hospitality industry, with restaurants like the Shed in Healdsburg closing and others on the bubble in 2019.
We also haven’t solved the need for more skilled workers in advanced manufacturing, but efforts are being made to boost interest in the field. An example is MFG Day for high school students who tour advanced manufacturing companies and hear from people who are employed by these companies. This is a collaboration of the Sonoma County Economic Development Board, CTE Foundation, Sonoma County Office of Education, Santa Rosa Junior College, North Bay Leadership Council and the manufacturers.
Employers will look for other ways to keep their employees happy as they try to retain top talent and attract new skilled workers. We can expect salary increases in competitive positions, a faster hiring process, and more programs to make the younger, diverse employees feel appreciated and part of the community.
And research from Indeed shows that the skills mismatch between job opportunities and job seekers has stayed level since 2017, perhaps helped by a rapidly changing mix of jobs.
There are things to do today to position organizations for this downturn. Perhaps, the key one is to always operate on a recession model. Assessing inefficiencies and shortcomings is easier before recession crisis mode.
Companies should be looking at paying down debt, incorporating more technology to reduce costs and focusing resources on core competencies and core customers. Hiring more contract workers is also one of the lessons learned from the last recession.
There is also the likelihood that the new federal tax laws that penalize Californians by capping their deductions for state and local taxes at $10,000 will trigger more company relocations out of state.
The days are past when companies are the magnet for talent. In this tight labor market, the talent is the magnet for the companies. Companies are following the talent out of California to states that have lower taxes and a quality of life some people no longer find available in the Golden State. This exodus could really grow if the state legislature decides to make changes to Proposition 13 on how commercial property is treated, split roll, ahead of the ballot measure to do that slated for the 2020 election. We will need to step up working with our local businesses to keep them here.
And 2019 promises to continue the roller coaster ride of the Trump administration. The chaos will play havoc with the economy, given there could be possible trade wars and other shocks to economic growth.
So fasten your seat belts; we are in for a bumpy ride in 2019. But with great hope that some of the rough patches will be eased in the North Bay as we work together to minimize the negative impacts and resolve to make the North Bay more resilient and economically competitive.
In Drafting a blueprint for a better Bay Area, San Francisco Business Times (Link), the authors call for a Grand Bargain on housing in the Bay Area. The authors are Fred Blackwell, CEO, San Francisco Foundation; Leslye Corsiglia, Executive Director, SV@Home, an affordable housing advocacy group in Silicon Valley; and Michael Covarrubias, Chairman and CEO, TMG Partners, a development firm focused on urban infill projects in the Bay Area. Together, they “are co-chairing a new initiative called CASA — The Committee to House the Bay Area. With support from the Metropolitan Transportation Commission (MTC), the nine-county Bay Area’s transportation planning, financing and coordinating agency, CASA is bringing together nearly 50 leaders from across the region to, in plain terms, figure this thing out.”
What is this “thing?” It is “getting the Bay Area on the right track out of this housing crisis. This is because the Bay Area has not one but many crises – not nearly enough housing production, a ‘missing middle’ of market-rate affordability, gentrification and displacement disproportionately affecting low-income residents and communities of color and not enough affordable housing for our most vulnerable neighbors, among others. Rather than minor policy changes, or limited funding infusions, they are asking our CASA partners to propose bold, groundbreaking actions that will move the needle on these difficult, seemingly intractable problems.”
The Compact addresses the three primary concerns of CASA, known as the “3 Ps,” for how to increase the production of housing, particularly affordable housing, how to ensure the preservation of the existing affordable housing stock and how to ensure the protection of current residents against displacement pressures that arise from new construction.
The Compact has recommendations for increasing new construction and protecting existing housing stock, especially for renters.
The Compact calls for the establishment of a regional leadership entity, Regional Housing Enterprise, to implement the CASA Compact, track and report progress, and provide incentives and technical assistance. The entity must be governed by an independent board with representation for key stakeholder groups that helped develop the Compact. The housing entity would not play a regulatory/enforcement role.
The CASA Compact will set a bold region-wide agenda for addressing protection of existing tenants, preservation of existing affordable units and production of both market-rate and subsidized units. To implement this agenda, a broad coalition of stakeholders, who have helped shape the CASA Compact, must stay engaged with state legislative advocacy, building support for raising new revenue and financing programs, tracking and monitoring progress, keeping the public engaged, and taking a regional approach to challenges such as homelessness. A regional approach can balance inequities and imbalances across multiple jurisdiction that have to contend with varying market strengths, fiscal challenges and staff expertise.
The Regional Housing Enterprise would have the authority to gather and disperse $1.5 billion per year, primarily for production. It is proposed that 60% goes to housing production (new housing), 20% to acquire and preserve housing, 10% for tenant protection services, and 10% to local jurisdictions for lost revenue due to caps on impact fees. Of the money collected through a new proposed regional tax measure, 75% will be spent in the county of origin and 25% will go to regional revenue sharing.
This regional approach is good news for the North Bay which needs a regional strategic housing plan. The workforce for the North Bay is shared by the three counties and the need for housing that workforce will best be met by addressing the housing needs regionally, rather than by any one city or county. Let’s hope this new approach gains traction and helps ease the shortage of supply here in the near future.
The horrible Butte Fire is a now the worst fire in California history. I am sure I am not alone in feeling despair that more communities are suffering from devastating fires. One thing we know from experience is that the victims need support and to know that someone cares. Organizations including the American Red Cross and the Humane Society say victims need cash more than anything else. If you would like to donate to them, you can do so as follows:
North Valley Community Foundation’s Fire Relief Fund: https://www.nvcf.org/
United Way of Northern California: Text BUTTEFIRE to 91999 to contribute
Red Cross: Text CAWILDFIRES at 90999 to make an automatic contribution of $10
Sacramento-based nonprofit RedRover has a list of resources for helping animals affected by the California wildfires here.
Cotra Costa-Solano Food Bank: https://www.foodbankccs.org/
Baby2Baby is working to get high-need items to children affected by the ongoing Camp, Hill, and Woolsey fires in California. Help them supply diapers, wipes, blankets, and other basic baby essentials to families in need by purchasing from their registry.
California Volunteers, a state office that manages volunteer programs in California, has created a list of services and donation options to help victims affected by the Camp, Woolsey, and Hill fires. Use this list to find information about making donations and volunteering.
For the Woolsey Fire (Southern California):
United Way of Greater Los Angeles is partnering with United Way of Ventura County to collect donations for its its Disaster Relief Fund.: https://www.unitedwayla.org/en/give/disaster-relief-fund/
As we go into the holidays, please keep those who have lost everything in mind. And remember how much it meant to have the support of the world in our recovery.
For this midterm election, it is crucially important to voters to show up at the polls. There needs to be a strong voter turnout to send a message that American voters are paying attention, engaged and want their voices heard. NBLC is pleased to announce our endorsements for this November’s election:
Santa Rosa City Council – District 2: John Sawyer (Inc.); District 4: Dorothy Beattie; District 6: Tom Schwedhelm (Inc.) – Note that Schwedhelm is running unopposed
Petaluma – Mike Harris for Mayor; Dave King (Inc.) and Michael Regan for City Council
Rohnert Park City Council– Pam Stafford (Inc.); Susan Adams
Santa Rosa Junior College Board: Jeff Kunde
College of Marin Board: Wanden Treanor (Inc.); Diana Conti (Inc.)
YES on Measure AA: Transportation Authority of Marin’s (TAM) renewal of existing ½ cent transportation sales tax to fund local transportation improvements and programs for traffic relief
YES on Measure M
YES on Measure N: Santa Rosa Housing Bond
YES on Prop 1: Issues $4 Billion in bonds for housing programs and veterans’ home loans
YES on Prop 2: Authorizes state to use revenue from Proposition 63 (2004) for $2 Billion in bonds for homelessness prevention housing
YES on Prop 3: Issues $8.877 Billion I bonds for water-related infrastructure and environmental projects
YES on Prop 4: Authorizes $1.5 Billion in bonds for children’s hospitals
NO on Proposition 6: Repeals the 2017 fuel tax and vehicle fee increases (SB 1) to fund road, bridge and highway repairs and requires a public vote on future increases. If passed, it would remove funding for the Marin/Sonoma Narrows, local road improvements and impact safety.
NO on Proposition 10: Repeals the Costa-Hawkins Rental Housing Act and allows local governments to enact rent control. If passed, it would depress future housing construction and worsen the housing crisis.
Please remember to vote and encourage everyone you know to register and vote, too!
The North Bay along with the rest of the San Francisco/Silicon Valley Bay Area is experiencing a housing affordability crisis that is negatively impacting families and their employers. The catastrophic fires of 2017 exacerbated this situation by destroying thousands of homes. While some of the initial immediate post disaster relief work has been completed, rebuilding the community will be a longer road ahead, and it will require a great deal of research and planning. In particular, as the region rebuilds and builds the housing necessary for our next generation of people and their families, we need to be sure that we’re responding to their changing needs and preferences. Please help this effort by responding (anonymously) to this survey and letting us know more about what your current needs are and what you would prefer to see in the future. This survey will be used to inform public and private sector decision-makers. It was developed by the Bay Area Council Economic Institute and is being distributed in partnership with the Rebuild North Bay Foundation and the North Bay Leadership Council.
This survey is 55 questions long and will take less than 10 minutes to complete.
Here are the links for the English and Spanish versions of the survey.
The need for workforce housing in Marin County is demonstrable, pressing and clear. While there are many reasons why workforce housing is needed, the impact on the economic future of Marin is one of the most compelling.
While others try to sort out traffic numbers and percentages of commuters coming from outside of Marin, Marin employers need no such clarification of where their workforce resides today, and perhaps more importantly, without more housing, where that workforce will reside tomorrow.
In today’s talent-driven employment market, employers are challenged daily to fill open positions. With an unemployment rate of 2 percent, ALL positions in Marin County are hard to fill. No doubt you have seen “Help Wanted” signs throughout the county. While you may not see signs for higher-level positions hanging in storefront windows, please know that we hear daily about the ongoing effort and expense to recruit and retain the needed workforce.
Not being able to house our workforce impacts all of us in Marin in several ways. The inability to fill positions reduces productivity, innovation, profit and more importantly, quality of life. The inability to fill key positions causes organizations to grow where talent is readily available or at its worst, relocate to a location with a good talent supply.
Another impact that affects employers is the need to pay increasingly higher wages to retain and attract talent, especially those that can’t afford to live in Marin County and can find work closer to home.
Kelley Hartman, senior vice president of Nelson Staffing, says, “The shortage of housing in Marin only exacerbates the talent shortage. The median list price per square foot for housing in Marin County is $656 (according to Zillow), which is higher than the San Francisco Metro average of $496. Coupled with the extremely low unemployment rate, high housing costs mean that employees working in Marin
County can — and do — demand higher wages due to this talent shortage.”
The cost of commuting often eats up whatever incentive increased wages provide. Hartman says, “Nelson recruiters have had to get much more resourceful in looking for candidates for Marin County positions. Reaching out to candidates in Sonoma and Alameda Counties with a more dense employment base has been a regular practice. However, more often than in the past, candidates tell us that the traffic and excellent employment opportunities in their own backyard do not offset salaries which are only marginally higher than what they could earn locally.”
The constant pressure to increase wages to fill positions takes its toll on employers’ bottom line as wages have to be adjusted for all employees as new employees’ wages are raised. That payroll increase leads to companies having to raise prices or fees to keep up with rising labor costs. And consumers feel it in their wallets as they pay more for products and services.
The lack of workforce housing, and failure to even begin to create housing in a reasonable ratio to jobs being created, has led Marin County to be hard hit. Focusing on the traffic obscures the bigger problem of the looming economic impact that the failure to house our workforce is driving. Without more workforce housing, we will be subject to a shrinking middle class a struggling economy, loss of tax
revenue, and less options for goods and services while paying more and more for what we need.
And let’s end with what we seek in workforce housing. Marin’s housing shortage is driven by the “missing middle.” The missing middle is both a range of housing that is in between single-family homes and high-rise apartment buildings, as well as the workforce who needs housing that is attainable on their salaries. Missing middle housing includes in-between housing like rowhouses, duplexes, accessory
dwelling units and apartment courts. The price point of this housing is what we need in Marin County where two-income working couples make too much to qualify for affordable housing but often too little to buy entry-level single-family homes.
Marin County employers are there to support the residents of Marin County. Now, it is time to work together to house the people who make our county a vibrant, safe, wonderful place to live. All of us should want the hospitals, schools, public safety, commerce and other essential organizations to thrive and be staffed by the best talent they can find. By creating more workforce housing, we all will benefit.
Joanne Webster is CEO of the San Rafael Chamber of Commerce; Cynthia Murray is CEO of the North Bay Leadership Council; and Steve Saxe is co-chair of the Marin Environmental Housing Collaborative.