PD Editorial: Despite fire scars, local economy is strong — for now

The outlook for the Sonoma County’s economy is positive on many fronts, an audience of some 500 local residents, business leaders and elected officials heard Friday. Employment has never been higher. Wages are climbing, and tourism is projected to continue to grow, particularly for the area’s emerging cannabis industry.

But the challenge that weighs heavily on the hearts of locals also weighs on the economy - the unknowns ahead concerning efforts to rebuild and rebound from the fires of October.

“Clearly the outlook for (Sonoma County) is very bright going forward,” economist Jerry Nickelsburg, director of UCLA’s Anderson Forecast, told those at the annual State of the County breakfast at the DoubleTree Hotel in Rohnert Park.

But as is the case with much of California, the local economy is constrained by high housing costs and a paucity of available workers. And neither situation is likely to change anytime soon - at least not without help.

Housing costs in Sonoma County are now above where they were before the recession hit a decade ago. “But it’s not a housing bubble now,” Nickelsburg said. “It’s a housing shortage. That’s a critical issue in increasing the labor force.”

Nickelsburg offered an analysis of the recoveries of three distinct areas that experienced disasters. The economy in Anchorage, Alaska, for example, never really recovered from the magnitude 9.2 earthquake in 1964 because of its isolation and inability to get the help it needed. Kobe, Japan, however, rebounded quickly from the devastating 6.9 quake in 1995 primarily because the nation “mobilized resources to rebuild. And it rebuilt rapidly.”

New Orleans, by comparison, fell somewhere between the two in its efforts to recover from the devastation of Hurricane Katrina in 2005. The region’s economy reached a recovery point in 2007 primarily because of a massive infusion of construction workers, many of them undocumented immigrants, who came from California following the downturn in the housing market here, he said. But the economy in New Orleans, as well as the rest of a nation, took a dive the following year.

The message for this area is clear: Sonoma County is not going to experience the full and quick recovery it needs without outside help (labor) and outside resources (more state and federal funding.)

Furthermore, it can’t begin to attract the construction workers that this region needs until it finds places for these individuals to live - and protects the housing stock that it still has.

It also can’t be satisfied to just get back to where it was before the fires. As Santa Rosa Mayor Chris Coursey reminded the sold-out audience on Friday, Sonoma County was already dealing with a major housing crisis. Santa Rosa in 2016 adopted a Housing Action Plan with the goal of building 5,000 homes in seven years. A year later, the city lost roughly 3,000 homes.

“So now the number is 8,000 in Santa Rosa,” he said. “We need many thousands more countywide.”

County and city officials are working closely together and with other agencies “to keep our foot on the gas to build new housing at the same time we are helping people rebuild,” Coursey said. But this effort requires a concentrated effort by all segments of the community, including businesses, nonprofits and neighborhood groups.

“This is not just a city problem. This is not just a county problem,” Coursey said. “It is all of our problem.”

The area’s economic future may depend on how much locals really believe that - and buy into it.