New federal report offers historic view of Sonoma County’s economy, housing
A new look at the local economy suggests that Sonoma County is returning to its roots.
Having survived the tech bubble bursting and the brutal Great Recession, the rural county is now seeing job growth increasingly coming from food production and hospitality.
The rise of jobs in those two sectors is one measure of change noted in a new federal report that looks back on the county’s economy and housing market since 2000. The report by the U.S. Department of Housing and Urban Development provides a historic overview of factors affecting where local residents live and work.
Keith Adams and Rob Hunter may have planted themselves right at the intersection of those two sectors. This summer they began releasing their first cloth-bound aged cheddar cheese from William Cofield Cheesemakers in Sebastopol. The two men have outfitted a 3,000-square foot cheese production/retail facility in the Barlow, a business center showcasing craft food makers and original eateries. The North Bay’s organic dairies and its growing artisan food, beer and wine sectors made this a natural place to start their business.
“It’s a mecca for people who are interested in good food and drink,” said Adams, a native Californian who has made cheese for nine years in Minnesota. Tourists and local visitors to the Barlow will find “an amazing collection of people doing cool things.”
The HUD report offers a snapshot both of the economy and of housing, and concludes that over the past 17 years here “we’ve seen a shift in the types of jobs,” said HUD spokesman Ed Cabrera. Its data on housing underscores trends long noted by government, building and real estate leaders - namely how a lengthy drop in home and apartment construction followed a national housing market crash and led to a lack of available units for both home buyers and renters.
In 2000, manufacturing was the largest jobs sector in the county, the report noted. But soon thereafter, the county’s telecommunication companies went through a wrenching shakeout, even as other tech employers transferred thousands of production jobs overseas.
Manufacturing now ranks fifth for jobs among local industries, and its employment base “is contracting and has been for quite some time,” Cabrera said.
However, while tech jobs declined, the county has increasingly gained a reputation for craft foods and beverages and has had considerable success in drawing tourists to experience the county’s food, wine, beer and natural beauty.
“I think what’s really interesting about Sonoma County’s economy, with the tech bust, is for better or worse, it’s returned to its roots,” Jesse Rogers, an economist who follows the county for Moody’s Analytics in West Chester, Pennsylvania.
Rogers added that the emphasis on agriculture-related products and tourism has been “in many ways for the better.” The related sectors draw visitors worldwide and add economic activity to “towns throughout the county.”
The county is in its seventh year of job growth, the HUD report noted. It represented the longest period of employment gains since a nine-year economic recovery from 1992-2001.
“We’re in a boom, with all the good and bad that goes with that,” said Ben Stone, executive director of the Sonoma County Economic Development Board.
The good news is the county has some of the lowest unemployment and highest hotel occupancy rates in the state, Stone said, with a jobless rate in July of 3.9 percent. The downside of economic growth is that employers are having trouble finding qualified workers, while renters and home buyers have seen a steep rise in housing costs. County manufacturing jobs hit their peak in early 2001 at slightly more than 20,000, according to state employment data. Tech companies then were major employers, including in Petaluma’s so-called Telecom Valley, which gained a reputation as a global supplier of communications equipment.
The high-water mark for that sector came in 1999, when Cisco paid $7 billion for Petaluma-based telecom startup Cerent. Two hundred employees at the 2-year-old company became millionaires that day, at least on paper, based on the value of their stock options. The county’s telecom sector then employed more than 12,000 workers, many of them engineers making more than $80,000 a year, double the county’s average wage at the time. But when the dot.com recession struck in 2001, local companies shed 6,000 jobs in two years, and many companies eventually shut down their operations here.
Those telecom jobs that left went to other states, other countries or simply “went away,” said Dick Herman, president of 101 MFG, a Petaluma-based alliance of manufacturing executives.