PD Editorial: Keys to economic recovery: housing and builders

Sonoma County already knows what it needs to do. But the message was driven home last week by an economist who has studied the impacts of areas that have been hard hit by natural disasters.

“Sonoma County will bounce back as fast you build housing,” economist Christopher Thornberg told some 500 community leaders Friday at the Hyatt Regency Sonoma Wine Country in Railroad Square. “It’s in your grasp. You just have to make some tough decisions.”

So what are some of those tough decisions? How fast are homeowners going to be allowed to rebuild? What regulatory obstacles are they likely to face? Where are we going to find the construction workers needed to do the work, and where are they going to stay? And where will the county allow housing in the future to help grow the economy and ensure the next generation of Sonoma County workers has a place to live?

“What this fire has done is simply intensified a (housing) crisis that already existed,” Thornberg said.

There’s no disputing that, especially given that 5,100 homes are now gone, and hundreds more are damaged and uninhabitable.

Meanwhile, the economic challenges facing the state and the nation are not much different. The future depends on finding workers - and finding places for them to live. California’s economy, for example, had been humming along nicely before slowing earlier this year in coastal areas including in San Jose, San Francisco and Los Angeles. The problem, again, is housing.

“We have reached the limits of employment growth because we’ve run out of workers,” Thornberg said.

We are not only running out of skilled labor, the workforce that exists is getting older. This is nothing new, of course. Economists have been talking for years about the problems that will to come when Baby Boomers begin to retire, as they’re doing now.

Which makes all the more befuddling the push by House Republicans to add an estimated $1.4 trillion to the federal deficit over the next 10 years through tax-cutting legislation approved last week.

It also underscores the disconnect of President Donald Trump’s push to build a wall on the U.S.-Mexico border, expand deportations and to rescind what progress had been made to help children of undocumented workers to stay and work in the United States.

“We’re talking about jobs? Folks, we need to talk about workers.” Thornberg said. “We’re running out of them.”

In order to rebuild, Thornberg estimates that Sonoma County is going to need nearly 19,000 construction workers, or roughly 6,500 a year over three years. The good news, however, is that rebuilding the local economy may not take as long as rebuilding neighborhoods.

The San Fernando Valley area, which took a $23 billion hit from the Northridge earthquake, and Florida, which took a $40 billion hit after Hurricane Andrew, both experienced sharp economic declines in the days following the disasters. But both recovered quickly once federal aid and insurance money started circulating through the regions.

“In a year, from a business perspective, this is going to be erased from your collective memory,” Thornberg told the crowd attending the Economic Development Board’s annual forecast breakfast. “You’re going to be back to where you were. This will pass.”

How soon, however, will depend on the region’s willingness to stay together and stay focused - on building.