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Friday, Apr 19, 2024

Ventura County = Economic Slug

Here’s a question for you: Why is Ventura County’s economy so poor? It should be booming. Ventura County has some great public schools, lots of upper-middle-class houses, beautiful vistas and abundant parks. It has to rank high on anyone’s livability index. The county should be attractive to residents and the businesses that follow them. Yet, the county’s economy has flatlined. This year stands to be its fifth straight of zero economic growth. Alarmingly, last year the county lost population – apparently for the first time in its history. Those who monitor the county’s economy closely could see this coming. The economists at California Lutheran University’s Center for Economic Research and Forecasting, ​Matthew Fienup and Dan Hamilton, after looking at several years of contraction in the county’s labor force and accelerating out migration, last year wrote: “We continue to wonder if Ventura County will see negative population growth in the near future.​” So, the experts may not have been surprised. But I am. It’s astounding that a county with so many gifts and that is a great place to live could be such an economic laggard that it sheds people. I mean, Detroit loses population. Not Ventura County. So why is the county’s economy so bad? In my opinion, the county has been too anti-development for too long. I can understand locals wanting to take a slow-growth approach, but Ventura County takes a no-growth mentality that borders on anti-growth. For example, voters approved the measure called Save Open Space and Agricultural Resources in 1998, and in 2016 they extended it for decades. SOAR, as it’s called, requires voter approval to build on farmland and a lot of open space. Translation: bare land is almost off limits to development. And even land that is developable faces so many hurdles it makes Los Angeles look streamlined. There’s a lengthy review process for real estate development along with hefty fees in nearly every city in the county. Some development occurs, yes, but not enough to grow the economy or meet the housing needs of residents. By contrast, the San Fernando Valley economy has been growing smartly – up at an average annual rate of 4.3 percent from 2014 through last year, according to the Valley Economic Forecast done by Fienup and Hamilton for the Business Journal. If you came from outside this area, you might assume the opposite. The newer and more affluent Ventura County would appear to have the upper hand, economically. But years of anti-development policies have dimmed what should be a shining star. • • • Speaking of the economy: If you keep up with the news, you know for sure that a dark economy is right upon us. You read predictions about it all the time in the news. There’s a trade war with China. Slowing growth overseas. An inverted yield curve. Ominous signs, all. But wait one minute. Do we really know a recession is imminent? I mean, consumers are still doing great. Unemployment rates are very low, wages are up and labor participation rates are high. And slower growth overseas may result in more capital flowing to the United States. Sure, the trade war hurts, but is that enough to trigger a recession? As for the inverted yield curve, that simply could be the result of an aberration in the financial markets. Fact is, nobody knows for sure when a recession will hit. Might be imminent. Might not. Flip a coin. What’s particularly interesting is how much division there is among supposed experts. Many are absolutely convinced that a recession will be upon us soon. Others are just as certain it won’t. You see this ambivalence playing out in the stock markets. One day, the markets plunge, and TV news people somberly intone that it’s because of the ongoing fears of a global slowdown, or some such. The next day – literally, the next day – the markets take off. Why? Well, the TV news people cheerily announce, it’s because another strong economic number got released. For what it’s worth, the California Public Policy Institute last week released its survey in which it asks Californians if they expect good or bad economic times in the next 12 months. Over the last 20 years, the respondents have amassed a good record of predicting recession; sentiment plunges a few months before the economy tanks. And sentiment has been going sideways for a while, but it hasn’t plunged. All this kind of reminds you of the old joke: We have 100 percent certainty that a recession is coming. But we have 0 percent certainty when it will arrive. Despite all the talk to the contrary, there’s still 0 percent certainty when it will arrive.

Charles Crumpley
Charles Crumpley
Charles Crumpley has been the editor and publisher of the San Fernando Valley Business Journal since March 2016. In June 2021, it was named the best business journal of its size in the country – the fourth time in the last 5 years it won that honor. Crumpley was named best columnist – also for the fourth time in the last 5 years. He serves on two business-supporting boards and has won awards for his civic involvement. Crumpley, a former newspaper reporter, won several national awards and fellowships for his work, and he was a Fulbright scholar to Japan.

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