Sonoma County economy 'soaring,' economist says, but risk of downturn rising
While Sonoma County’s unemployment levels are at a historic low, housing availability and the potential for a larger economic downturn pose challenges in the second year of the region’s recovery from the 2017 firestorm, a leading California economist told Sonoma County government, civic and business leaders Friday.
Sonoma County’s economy is “soaring,” with a 2.6 percent unemployment rate, Jerry Nickelsburg, a senior economist with the UCLA Anderson Forecast said at the annual State of the County breakfast.
Nickelsburg, a Santa Rosa native, said he doesn’t expect a recession in the county in the next six months, but warned that risk of a future economic imbalance is rising.
Meanwhile, the region’s low unemployment rate poses a challenge for some employers attempting to recruit staff, he said, and the shortage of housing remains a “big constraint.”
“What (the fires) did was speed a churn, with people who can earn high incomes, who can telecommute coming in and demanding the housing and the Sonoma lifestyle and people with lower incomes migrating out … there are real policy decisions here about how the community changes,” Nickelsburg said.
The recovery from fires that destroyed more than 5,300 homes in Sonoma County has been “phenomenal,” he said, but there’s much more to be done.
“Sonoma (County) has really been at the forefront of the recovery process in light of what other communities have done,” Nickelsburg said.
Ben Stone, the executive director of the Economic Development Board, who publicly announced Friday his plans to retire in coming months, said housing is “tight.” But he highlighted “a surprising number of housing projects” permitted or under construction in the county and its nine cities last year, including 2,400 units in Santa Rosa. The demand for housing locally and statewide could drive construction, but the prospect of increasing interest rates could “cool off” the housing market, Nickelsburg said.
“Overall, we have a good outlook,” Stone said in an interview. “Things will be slowing as they do in any economic boom. Eventually things mature. Generally, it’s steady as she goes.”
Elizabeth Brown, CEO of the nonprofit Community Foundation Sonoma County, said the county should consider “underlying inequities” as the recovery continues. Her foundation collected more than $14 million from 7,500 donors for a long-term recovery fund, and is working on an initiative to bring together nonprofits and the public and private sectors to create shared goals and integrate recovery efforts.
“We need to acknowledge the many factors that continue to make this a tale of two counties,” Brown said. “For some, Sonoma is a county where people have the resources needed to survive and thrive, not just through disaster but through the everyday challenges that are the pillars of a good life: financial stability, work opportunities, access to health care, and much more. For other residents, including far too many children, Sonoma is a place sorely lacking in those basic pillars.”
Nearly 600 attendees from the public, private and nonprofit sectors turned out for the breakfast at the DoubleTree Hotel ballroom in Rohnert Park. Sonoma County Board of Supervisors Chairman David Rabbitt touted a number of initiates to pave the way for housing and infrastructure improvement.
In the fire-ravaged Fountaingrove area, Medtronic has partnered with nonprofit Homes for Sonoma to provide tiny homes for fire victims on the campus, he said. The county has reduced fees and processing times for permits, helping spur housing growth, Rabbitt said.
“We are a strong county and while we don’t know what the year will bring, we do know we need to continue to move forward, continue to face challenges head on and continue to take care of one another,” Rabbitt said.