Report shows uneven economic recovery in Sonoma County

Surging tax revenue, rising property values and booming tourism have propelled Sonoma County government to its healthiest financial state since the recession, a recent slate of county reports show.

Yet as the economy recovers, the gap between the county's wealthiest communities and its poorest has widened, according to a new analysis of Census Bureau data.

By some measures, the county's richest areas are showing strong signs of prosperity, while some neighborhoods have actually experienced an economic downturn in recent years, according to a report published last month by the nonprofit Economic Innovation Group, a Washington, D.C.-based research and advocacy firm that assesses nationwide poverty trends.

The report analyzed communities across the United States by ZIP code, focusing on housing vacancy rates, percentage of the population with no high school degree, unemployed adults and the number of people living below the federal poverty line.

In Sonoma County, the data shows what many local residents already know - that Monte Rio, Cazadero and Guerneville, for example, are more economically disadvantaged than wealthier east Santa Rosa, Sebastopol and Healdsburg. Roseland and west Santa Rosa also showed significant disparities with other better-off areas.

“Well-being diverges between cities and states, but even more starkly within cities and at the neighborhood level,” the report's authors found. “For those living in distressed ZIP codes, the years of overall U.S. economic recovery have looked much more like an ongoing downturn.”

Source: Economic Innovation Group

The research firm, founded last year by Silicon Valley technology and venture capital moguls, advocates for policy change to address rising inequality across the U.S. It found that in economically distressed ZIP codes, nearly a quarter of adults have no high school degree, more than half don't have jobs and more than a quarter live in poverty.

The findings have been most apparent in Sonoma County's tight housing market. Housing development has stalled in many places countywide, leaving few opportunities for first-time home buyers, and rent increases have hit low-wage earners hardest, real estate experts and local economists said.

“Buying in this market right now, especially for first-time buyers, is very difficult because there isn't a lot of inventory to select from,” said Nick Grotjahn, a real estate broker with Novato-based Premiere Realty. “That's why everyone is fighting for rentals right now. Fewer people have the ability to buy, so that drives down vacancy rates for rentals and pushes rents even higher.”

Only around 1 percent of the apartments in Sonoma County are vacant, creating intense competition among tenants looking for somewhere to live. As a result, rents have climbed 40 percent in the past four years, according to Real Answers, a Novato real estate research firm.

And while the market has challenged renters, homeowners are more well-off than they have been since real estate values peaked before the recession in 2006, officials said.

“It's reflective of a very strong economy,” said Ben Stone, executive director of the county's Economic Development Board. “At the same time, any time there is a recovery that is fast and broad, places suffer housing challenges.”

The local recovery is expected to continue its steady ascent, county officials said.

Property tax revenue - the county's largest source of discretionary money - shot up by $11.3 million in 2015, an 8.1 percent increase from 2014, according to a county financial report released Feb. 29.

Revenue is expected to grow an additional 7 percent this year and 4 percent in 2017, said Erick Roeser, a financial analyst in the Auditor-Controller-Treasurer-Tax Collector's office.

The county's total property tax roll - a measurement of assessed property values countywide - was pegged this year at a record $76.6 billion.

Tax revenue is up across the board, according to the county report. Hotel bed tax revenue rose 13.3 percent in 2015 from the year prior, sales tax revenue grew 4.9 percent and revenue from special sales taxes for public safety rose by 6.6 percent.

“The tax numbers substantiate the recovery we're seeing in things like the unemployment rate and tourism,” Stone said. “People are traveling here from across the country and consumer confidence is high.”

The county's unemployment rate also fell in February to 4.3 percent, down from 5 percent a year ago, according to state employment data.

“We have a record number of 206,000 people working,” Stone said.

Many of those people, however, are working part-time and seasonal jobs - a term often referred to as “under-employment.” Statewide, 12.7 percent of the workforce was underemployed in 2015, according to the state Bureau of Labor Statistics.

The Board of Supervisors is expected to review the county's Comprehensive Annual Financial Report later this spring.

You can reach Staff Writer Angela Hart at 526-8503 or On Twitter @ahartreports.

UPDATED: Please read and follow our commenting policy:

  • This is a family newspaper, please use a kind and respectful tone.
  • No profanity, hate speech or personal attacks. No off-topic remarks.
  • No disinformation about current events.
  • We will remove any comments — or commenters — that do not follow this commenting policy.
Send a letter to the editor

Our Network

The Press Democrat
Sonoma Index-Tribune
Petaluma Argus Courier
North Bay Business Journal
Sonoma Magazine
Bite Club Eats
La Prensa Sonoma
Sonoma County Gazette