April 2, 2024
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Ventura County least affordable area in nation to buy a home

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Matthew Fienup, executive director of the Center for Economic Research and Forecasting, at the Thousand Oaks think tank’s 2024 Ventura County economic forecast presentation on Feb. 28. (courtesy photo)

Ventura County now has the dubious distinction of being the least affordable housing market in the United States.

That’s because it has the most restrictive land use policies of any county in the nation.

Those are two key findings of the Center for Economic Research and Forecasting’s 2024 Ventura County economic prognosis.

The California Lutheran University think tank in Thousand Oaks unveiled its annual forecast at a Feb. 28 program at the city’s Scherr Forum Theatre.

“Ventura County’s housing market is in a state of crisis,” the study says.

High housing costs depress the county’s economy and imply that it will not be competitive in attracting households and companies relative to other counties in the U.S., according to the forecast.

Such costs also make it difficult for workers and their households to locate near their jobs, the forecast says. 

The county has seen a declining population from a peak of 850,000 in 2015 to 826,000 according to the latest data, the report notes.

“When you have to make so much money, a six-figure salary to afford a home – and not the nicest home, but an unremarkable home – it leads to changes in people’s decisions and problems for employers that don’t have a workforce,” Dan Hamilton, CERF’s director of economics, told the Business Times at the program.

The study noted, for instance, that biotech giant Amgen in 2017 announced plans to reassign, relocate, or lay off nearly 500 employees from its Thousand Oaks headquarters as part of its plans to open a new facility in Tampa, Florida.

The company cited Tampa’s affordable cost of living as one reason for the move.

“They couldn’t attract and retain skilled talent in Ventura County,” CERF Executive Director Matthew Fienup, who led the Feb. 28 presentation, said.

“That was a wake-up call,” he said.

Ventura County is now the least affordable housing market in the United States, Fienup said. It was the third least affordable metro area in the nation at the time of last year’s forecast.

According to this year’s study, a household with $150,000 in annual income can afford just 4.9% of available residential listings in Ventura County, specifically the Thousand Oaks/Oxnard/Ventura metro area.

By comparison, a household making $150,000 in the Riverside metro area can afford 35% of residential listings.

As of December 2023, Ventura County’s median price for an existing single-family home was $882,500, the forecast says.

The median price for the United States is $387,000, according to the report.

CERF forecasts that Ventura County’s home prices will continue to increase, with an overall 16.5% rise from 2023 to 2026.

The most affordable housing market in the country is the Youngstown, Ohio/Warren, Pa. region.

The affordability scores are provided by the National Association of Realtors.

Least affordable is not the same thing as most expensive, Hamilton said.

For instance, the San Jose area has more expensive homes than Ventura County but also has higher incomes.

“You balance the two, weigh them against each other, to get the measure of affordability,” he said.

The affordability of renting apartments in Ventura County “is also in a low state,” the forecast says.

The overall July 2023 average monthly rent in the county was $2,570, according to the study.

A renter would need an annual salary of $154,450 to reasonably afford the average unit, but the county’s first-quarter 2023 average salary was only $70,200, the report says.

The county’s home production rate has fallen dramatically since the 1980s, when it was 7.1 new housing permits per thousand population, the study says.

In the 2010s, it was 1.5 new housing permits per thousand population, according to the forecast.

That’s attributable to what CERF says is Ventura County’s restrictive land-use policies, “the most stringent … of any county in the United States.”

Save Open Space and Agricultural Resource laws are a series of initiatives that require a majority vote of residents before agricultural land or open space areas in the county can be rezoned for development.

SOAR has been “described by a number of land use economists as ‘draconian’ restrictions on growth,” the forecast says.

Indeed, since the peak of the county’s GDP in 2007, the average annual GDP has been a contraction of 0.8 percent, according to the study.

The county’s average annual growth for 2023 to 2026 is forecast to be an improvement, but not much – negative 0.1 percent.

CERF’s forecast is computed under the assumption that the county’s housing and land use policies and regulatory environment will not change materially from 1995 when SOAR was initially established.

But it shouldn’t stay that way, Hamilton says in the report.

He calls for a public discussion about adjustments to the policies that will help reverse the county’s “current status of economic and demographic decline.

“Changes to housing production and the status of housing, ownership as well as rental, will not only help the overall Ventura County economy in many respects, it will also provide for the essential needs of our workers, families, and businesses,” Hamilton writes.

email: mharris@pacbiztimes.com