Editor’s Note: Annette Walker is president of the City of Hope Orange County, which is building a $1.5 billion medical complex in Irvine. Paul Bay is CEO of Ingram Micro, which reported $48 billion in sales in 2023, making it the largest company by revenue with headquarters in Orange County. Walker, chair of CEO Leadership Alliance Orange County (CLAOC), and Bay, housing lead for CLAOC, wrote this Leader Board.
For Orange County to sustain a robust and competitive economy, it’s crucial to address the housing needs of middle-income earners – the often overlooked “missing middle.”
Public and private leaders must collaborate to find housing solutions our middle-income employees can afford. This is key to attracting and retaining top talent, the lifeblood of a thriving economy.
When people have access to meaningful career opportunities and quality housing that aligns with their needs and aspirations, businesses benefit. Recognizing this, members of CLAOC have formed a Housing Task Force, led by Ingram Micro, to find more accessible and affordable solutions.
OC’s Biggest Hurdle
OC’s high housing costs are a major hurdle.
According to The Council for Community and Economic Research, OC is the sixth priciest housing market in the U.S., with apartment rents more than twice the national average. The average rent for a two-bedroom apartment in Irvine is $4,435. In October 2024, the median home sales price in OC was $1.2 million.
CLAOC surveyed young professionals in its OC Fellows program, aimed at retaining early-career talent in OC. The results were telling: 92% of women and 64% of men surveyed find Southern California housing unaffordable.
More than 56% of Southern California renters are “cost burdened,” spending more than 30% of their income on rent, with nearly a third spending 50% or more, according to a report from the Joint Center for Housing Studies of Harvard University.
OC residents face above-average taxes, transportation and energy costs, which consume significant earnings. A salary.com comparison shows the cost of living in Irvine, CA, is 28.9% higher than in Austin, Texas.
Residents of all income levels must have access to housing to achieve a thriving OC for all.
Greater housing affordability across all income levels fosters diverse, vibrant and healthy communities. When families spend less on housing, they have more disposable income to spend on other goods and services, which strengthens both the economy and resident well-being.
The Gap in Workforce Housing
Traditionally, federal and state funding supports much-needed housing for families at or below 60% of area median income (AMI). That leaves a significant gap with the next bands of income.
The Urban Land Institute defines “workforce housing” as housing that meets the needs of families of four earning between 60% and 120% of AMI.
The 2024 AMI in OC is $129,000 for a household of four or $90,300 for an individual, according to the California Department of Housing and Community Development.
Even those on promising career paths with high earning potential often struggle to afford OC housing early in their careers.
In the competition for top talent, housing is a crucial factor for employees.
Housing is a major factor in deciding where to live and work, and housing is the biggest challenge OC employees face. In 2024, the University of California, Irvine, surveyed 1,100 current and former OC residents and found that the top reason residents choose to leave OC is the cost of housing — 78%.
OC graduates often seek jobs in other regions or live here only until housing costs lead them to relocate. Others endure long commutes. If they have families, housing challenges are amplified.
The risk is clear: we will keep losing our top talent to more affordable areas, even when many would prefer to stay. OC employers can’t afford to lose such vital talent.
We face a high risk of a knowledge worker shortage across industries. Consider the future healthcare workforce, critical for a thriving hub. One of the most difficult roles to fill is a staff registered nurse who earns an average salary of $140,000. They don’t qualify for affordable housing yet struggle to keep up with ever-escalating housing prices.
When people feel secure in their housing, they are more likely to feel connected to their community. Notably, OC Fellows who had recently bought a home said owning a home contributed to their high confidence that they will stay in OC.
Solving attainable housing for middle-earning employees will fuel OC’s innovation hub.
A D.C. Policy Center article highlights housing as a driver for the growth and vitality of a local economy by supporting critical growth sectors and roles.
However, when professionals like junior software engineers or entry-level data analysts can’t afford OC’s high rents, organizations will continue to struggle to find talent, slowing innovation and growth.
Workforce Housing Success Stories
West Holden Place in Denver’s Sun Valley is a 77-unit mixed-income workforce housing project for those earning 80% to 120% of AMI. Funded by state and local government partners, the community offers one- and two-bedroom apartments.
Its innovative modular development system permits quicker, more cost-effective construction, saving an estimated 20% to 25% in hard costs and at least 40% on construction time.
Cameo is a new community in Orange, offering studios, one-, two- and three- bedroom apartments. Waterford Property Company partnered with California Statewide Communities Development Authority (CSCDA), which acquired the project on September 2021.
Through CSCDA Community Improvement Authority’s Workforce Housing Program, government bonds are issued to acquire market-rate apartment buildings and convert them to income and rent-restricted units offered at an average of 10.6% under market price for middle income households earning 61% to 120% of AMI. CSCDA was able to raise long-term tax-exempt financing from major institutional bond investors.
Insufficient housing for middle-earners will perpetuate the “brain drain” and threaten OC’s future economic growth.
OC needs more housing for middle-income families and young people starting their careers. Our workforce should be able to afford to live in the same communities where they work.
Addressing this challenge head-on through public-private partnerships, we can support our workforce and strengthen OC’s position as a leader in talent retention and economic opportunity.
Drawing from successful projects across the country, OC employers are collaborating on a series of pilots that we will explore in a future OC Leader Board.
