Last year Chapman University researchers Marshall Toplansky and Joel Kotkin published study “OC Model: A Vision for OC’s Future.”
“Did it on a shoestring,” Toplansky said. “KPMG [my former employer] kicked in some dollars. And we presented it.”
And?
“Not much happened.”
The study sounded some alarms, though familiar ones.
“It’s hard to overstate the challenges posed by today’s California housing crisis.” Toplansky said. “The average price of buying a house is now two and a half times the national average.”
Turns out at least a few influential people did read Study I, with enough juice to convene a group of 35 chief executives and other leaders.
“We interviewed 100 people. That was 10 months ago,” Toplansky said. “The demographers have been busy since.”
They’ll present the findings of wider, well-heeled study “Orange County Focus—A View of the OC’s Economic Future” on March 29 at Newport Beach’s Pacific Club.
Some discoveries may surprise folks—it’s not all foreboding, but that’s the majority tone.
The Reckoning
At last week’s forum, Toplansky gave a preview of their upcoming study.
In 2015, only Los Angeles was less affordable to homebuyers. Forget Silicon Valley’s seven-figure median prices. Incomes are higher. Our ratio is 7.97; it takes nearly eight times median income to buy the median-priced home—neighboring Phoenix, less than four times; red-hot Denver, 4.5.
That helps explain why Toplansky said, “We’re losing our seed corn generations.” Generation X, 35 to 49, minus 3% since 2000. Austin, Texas, up nearly 50%.
On hand with Toplansky for his OC Forum presentation were county Supervisor Michelle Steel and OC Business Council President and Chief Executive Lucy Dunn—all county boosters by nature, and by nature of their jobs. And all with this in common: Their children live elsewhere.
“I wanted my daughter in San Diego to live here,” Steel told the luncheon crowd. But median household income here is $78,000. Well above the U.S. at $51,000, but still not enough.
“Young people can’t come or stay. You can’t buy a house,” the former board chairman noted. “We need higher paying jobs.”
Dunn’s two sons, Mater Dei graduates, found more lucrative opportunities in the Bay Area, her daughter-in-law, as well.
High-paying jobs. The study’s other big rub—the two graphics here say it all:
High-wage jobs here since 2007: minus 16,000. Low- and midpaying: plus 69,000. Silicon Valley’s high-paying: plus 201,300.
As the second graphic shows, a number of cities in this post-Great Recession expansion are also growing good-paying jobs like weeds. New York, Dallas-Fort Worth, all 100,000-plus on high-wage jobs since 2007. Many of those good payers are STEM jobs. OC since 2007: plus 4% STEM jobs. Raleigh, N.C.: plus 35%.
Even the good news on STEM and new economy is muted. “We had almost $1 billion in venture capital in 2017 (per PitchBook),” Toplansky noted. Silicon Valley had 35 times that much.
And these surprises:
• OC’s wealth isn’t as wide as you might think. Of the 35 largest counties, we rank 31st in individuals making more than $75,000, according to the U.S. census. Over $200,000? 23rd of 24 at 12.3%. Santa Clara is tops at 21%.
• Few economists would argue that domestic in-migration isn’t a growth engine. OC 1950s to ’80s, anyone? Since 2010 our domestic count is minus 23,469. OK, L.A. approximately minus 350,000. Some schadenfreude.
Assets
If the vying for Amazon’s HQ2 reaffirmed anything, it’s that the competition for economic development is stiff.
Two hundred and thirty-eight cities bid for the promised bounty of 50,000 high-paying jobs. And a good gaggle vie these days for a lot less. That’s never been OC’s long suit, hampered by the lack of a downtown, a singular strong city, and as was also reaffirmed by the write-ups around Amazon’s derby, the lack of a strong identity.
“OC’s image is indistinct,” said Toplansky, an Easterner who came West in the late ’90s and stayed. “We’re thrown in with the suburban sprawl of Southern California. Our traffic is much better than L.A., but that’s not known. No one’s out there talking about us. Part of the problem is marketing.”
And the frustration is that OC has a story on the left side of the ledger that’s easy to market.
“You need to be a superstar of something, and we are. We are of real estate and real estate finance; of lifestyle industry jobs; and of course med-tech.”
And our “natural amenities index”—for simplicity: weather—a nation topper.
Some upside surprises:
• No. 3 in self-employment. No. 5 in manufacturing jobs.
• In “arts and lifestyle employment,” OC is far-and-away No. 1, ahead of San Francisco and L.A.
Lastly, perhaps no surprise to those of us who’ve been here awhile: Orange Countians love Orange County.
As part of the study, the researchers at the Argyros School of Business interviewed 1,200 professionals around the country with incomes of $80,000-plus. The No. 1 desirous place to relocate to was San Diego. However, OC respondents by the widest margin led the poll for saying they wanted to stay where they were.
“The dog is eating the dog food,” quipped Toplansky.
Next
He said a 90-second video, “This is OC,” will accompany the March presentation.
It’s possible there will be one development before late March. There’s been talk of the establishment of an OC CEO Leadership Council, maybe similar to what many big cities—with about a 300-year head start on OC—have long had, some covertly back in the day. And some prominent names have been proposed to head the group.
“Part of our strategy has to be to elevate ourselves,” Dunn contends.
Such a council, fronted by notables in the middle of today’s OC business community, might be a real good start.
