That’s the updated number from the federal Dept. of Housing and Urban Development. It’s been driven by soaring rents and housing prices to say nothing of other price points. Have you noticed how much cheaper gasoline is in Tracy than Pleasanton?
A second front page story by CalMatters reported the economic challenges faced by college students from poorer families. Vanessa Rancano reported that median rent statewide had climbed about 44 percent in a decade and that number is much higher in the Bay Area where a shortage of new units has seen both for-sale housing prices and rental rates skyrocket.
These headlines help focus on the East Bay Economic Development Alliance’s annual outlook report prepared by Beacon Economics and its principal Chris Thornberg. He’s optimistic about economic growth in 2018, but warns that the current expansion at nine years is among the longest on record—the same caution that Gov. Jerry Brown has issued with his budgets for the last three years. Expansion cannot go on forever.
For this year, Beacon expects job growth to continue and the unemployment rate to continue to decline in the East Bay. He also cautions about the lack of housing where the new home construction is still lagging historical averages that coupled with low inventory of for-sale homes continues to drive up prices.
For the Bay Area, employment in 2017 grew 1.9 percent—a rate that continues to outpace the national growth.
Wonder why roads are congested: about one-third of East Bay (Alameda and Contra Costa residents) leave the county to work in the South Bay or San Francisco. Mix in the Solano and San Joaquin County commuters and you understand why I-680 is a parking lot many mornings.
More good news: taxable sales in the East Bay grew nicely in 2017 reaching a new record of $48.9 billion as did venture capital investment that hit $2.4 billion last year. Commercial real estate vacancy rates remain near post-recession lows, while rents are climbing. Interestingly, the vacancy rate for retail, which is struggling nationally, stood at just 6.6 percent, while office was at 14.1 percent. Warehouse, a bullish category, hit a low of 6.7 percent.
The challenge is that housing, with the relatively affordable East Bay prices versus the South Bay, the Peninsula or San Francisco, prices soared at double-digit rates.
With very low unemployment rates, Beacon predicts continued economic expansion for the East Bay.