by Gene Beley, CVBT Correspondent
May 28, 2017 9:01pm
• They explain how it relates to affordable housing needs in the region
• “We need a major makeover in this state to address the housing issue”
• With Video
The brake lights that illuminate much of the I-205 and I-580 commute into the Bay Area in the predawn hours also illuminate the high value of the commuters, according to research by Juliana Borst, a graduate research assistant at Pacific, who did a complete analysis of commuters’ origins and destinations, according to Mr. Pogue.
He told a recent Stockton forum sponsored by the San Joaquin Council of Governments that the profile of the commuters that emerged from Ms. Borst’s research shows the Valley-to-Bay commuters have a high degree of education. “They represent an important part of this county’s economy,” he says.
Additional research has revealed the income levels and percentages of people who earn over $100,000 working in the San Francisco Bay Area and San Joaquin County. Mr. Pogue says 43 percent of the people commuting out of the northern San Joaquin Valley into the Bay Area are earning over $100,000 a year.
“Fifty-nine percent of people commuting into the San Joaquin Valley earn over $100,000 a year,” he says. “Only 59 percent of those commuting out of San Joaquin County to Sacramento earn over $100,000.”
The research identified “mega-commuters” — those who commute over 90 miles one way -- as well as “extreme commuters,” who travel over 50 miles one way. A 2013 study that looked at every county in America put San Joaquin County as the sixth highest in the nation for these categories.
“That is a huge challenge for peoples’ quality of life,” says Mr. Michael. “What are the reasons for doing this? How has it evolved over time? Can we do things like targeting employment and skills development and other strategies for people here to hopefully lessen some of their necessity to commute?”
Mr. Michael, who is an economist and director of the university’s Center for Business and Policy Research, showed a chart of migration in and out of San Joaquin County that looked like a yo-yo.
“The past three years is about the only flat spot we’ve ever seen,” he told the forum. “We’ve seen the inflows of migration sort of recover from the Recession years. We’re attributing the dip in 2013 to the Stockton bankruptcy. We settled into a remarkable three years of little more than 4,000 domestic migrants on net coming from the Bay Area. In 2016 there was a big increase in outflow but migration here stayed where it is. Our population forecast for the county is coming down a little bit. Population growth in California is declining for several reasons like birth rates.”
Mr. Michael said inequality and poverty are rising in San Joaquin County as it is nationally. “The level of inequality within the community is not quite as high as seen in some other areas,” he said.
San Joaquin County has seen big growth in logistics jobs and public employment and health care, he said.
“San Joaquin County has been a big recipient of the Obama Health Care Act. San Joaquin County is very similar to the U.S. average but our households are larger and the medium income here is around $53,000 a year — lower than California as a whole but higher than places in the South Central Valley.
“Lower income in San Joaquin County has more to do with fewer high-income households that drive some of the inequality. There is a high concentration of poverty in Stockton around the freeways and downtown and some areas to the north and east. The lowest levels of inequality are in Tracy and Lathrop. Those commuters are intensely middle class with not a lot of poverty or high wealth either. They fit the commuter profile that you make enough money to make the commuter costs worth it. But if you’ve got a really high paying job, you’re not going to move to Tracy and commute and can afford to stay in the Bay Area.”
Mr. Michael said rent data is the hardest to find. But he said the gap has grown with about an 8.1 percent increase in rents since late 2016. He said according to Zillow, “which has a new economist,” rents are about $1 a square foot in San Joaquin County, which is not as bad as the Bay Area.
He said something to watch is, as mortgage rates begin to go up from their 3 percent to 3.5 percent rates, that will become a game changer with interesting dynamics. “It will effect the affordability in our county in buying homes,” Mr. Michael said. Large shares of former homeowners are now renters. And many homeowners are paying too much for their mortgages now. He said anything over 35 percent of income is too much.
San Joaquin County Supervisor Chuck Winn told the forum that he feels the main problem is governments have created too many regulations and zoning problems for affordable housing. He said where 80 percent of the lawsuits are against infill development, a litigation structure has developed and “that’s a challenge.”
He said another challenge is the “housing ladder.”
“Over the decades individuals gain more income by age, they buy up and vacate their previous houses. Oftentimes, the young couples that don’t make a lot of money buy the oldest house in the neighborhood, fix them up and sell them,” Mr. Winn said. “Unfortunately, there was a period where the governments started tearing down those old neighborhoods so they aren’t available to build up now so that has become a problem. In Los Angeles up to 2013, inclusionary housing policy led to 770 affordable units being sold over seven years but reduced the total number of new units built by more than 17,000 and raised the average price by $50,000. That was the reverse of what was intended.”
Mr. Winn said the other part is in strictly regulated cities where prices rose 30 percent to 60 percent. “According to the National Association of Homebuilders for every $1,000 in increase in home prices, it leads to about 232,000 households that are priced out of the market,” said Mr. Winn.
“We need a major makeover in this state to address the housing issue,” he concluded. “I’m not just talking about lower income people. I’m talking about the full spectrum. I work very closely with our disadvantaged communities. The reality is, until we can make drastic changes in the state, we will still be outpacing the incomes of these individuals to buy a home.”
For more details of the migration patterns of commuters, watch the video here: