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Economist John Husing tells a gathering of business and community leaders that he likes the region’s job creation but is concerned about some other things, in particular how many people there rent rather than own their homes.
The High Desert economy is on the mend and should continue to improve into 2016, although the region does have several clouds looming on the horizon, according to Inland Empire economist John Husing.
Husing was the keynote speaker at a fundraising luncheon held Nov. 23 by Joseph Brady, longtime commercial real estate broker in the Victor Valley and president of the Victor Valley College Board of Trustees.
The luncheon also featured Ted Alejandre, superintendent of San Bernardino County Schools, and Roger Wagner, president and superintendent of Victor Valley College.
Like his assessment of the Ontario-Riverside-San Bernardino market earlier this year, Husing gave a mostly optimistic outlook of the High Desert’s immediate economic future, based mainly on the number of jobs created in the High Desert during the past few years.
In a detailed power-point presentation, he noted that region has increased its job growth during each of the past five years, including a 4.1 percent increase in 2012 and a 5.8 percent increase two year ago.
In both instances, that job growth was stronger than the rest of the Inland Empire, which was hit harder by the recession than most regions in the state and, like the High Desert, is still recovering from the worst of the downturn.
From 2009 through 2014, the High Desert added nearly 14,000 jobs. During the recovery the region has created more moderate-paying jobs, while adding fewer low-paying ones, than the state of California, Husing said.
All of this even though the region’s unemployment rate is higher than both the state’s and San Bernardino County’s unemployment rates, which were 5.8 percent and 6.2 percent, respectively, in October.
“It’s getting better,” Husing told the crowd of about 300 at the Hilton Garden Inn Conference Center in Victorville. “We’re seeing a better overall economy, not just with job growth but also housing affordability doing a lot better.
“The problem is that it takes longer for a recovery to get to an edge market, and the High Desert is definitely an edge market,” said Husing, who has been studying economic trends in the Riverside and San Bernardino counties for about 50 years. “So it takes time, but it will definitely get here.”
One reason for optimism is that the two-county region has always been a good area for job growth: starting in 1964, the year Husing began studying the region’s economy, up until 2008 when the recession hit, the Inland Empire always added jobs.
“We’ve had strong job growth for the last three years, and next year could be the best year ever,” said Husing, who predicted that the High Desert will attract more health care jobs and that the region’s logistics market will continue to thrive during 2015.
But the picture Husing drew of the High Desert economy wasn’t entirely rosy.
The first issue on the negative side of the ledger was rental housing, specifically the high number of single-family homes in the High Desert that are occupied by renters, not owners.
Husing displayed a chart that showed 51.4 percent of the houses in Barstow were occupied by renters in 2014, along with 46 percent in Victorville, 44.5 percent in Adelanto, 36.1 percent in Apple Valley and 34.3 percent in Hesperia.
Those numbers pencil out to 40.7 for the entire region, and in each city the percentage of renters was higher last year than it was in 2008, according to Husing’s data.
Husing, who has blamed investment buyers for causing the housing crisis that brought on the recession, called the high percentage of home rentals the High Desert’s greatest economic problem.
“Even on the low end of the spectrum, one-third of the market is renting,” Husing said. “That’s way too high. This is by far the single biggest issue facing the Inland Empire today. It’s what caused San Bernardino to go into bankruptcy, and it could do the same thing up here. Unfortunately, it’s a difficult problem to get hold of, but it has to be done.”
Husing also noted the number of people in the High Desert who live below the poverty line: 42.1 percent in Adelanto, 29.5 percent in Barstow, 27.6 percent in Hesperia, 23 percent in Victorville and 19.5 percent in Apple Valley.
All of those numbers are higher than San Bernardino County, and for people under 18 the data is even worse, from a high for 51.3 percent in Adelanto to a low of 25.2 percent in Victorville.
At the same time, about one in three people in the High Desert are on some form of government assistance, Husing said.
Those three issues combined, especially the high percentage of rented houses and people who are living below the poverty line, make it more difficult to attract businesses to the High Desert and keep them there, Husing said.
Brady, who is seeking his second four-year term next year on the board of trustees, said he thought Husing did a good job of spelling out the positives and negatives facing the High Desert economy.
“I’m an optimist, so I always think the glass is half full, and I came away feeling pretty good about where we’re at,” said Brady, who is president of The Bradco Cos. in Victorville, one of the largest commercial real estate brokerages in the High Desert. “I think the data shows is what the real problems are and what we need to work on.”
The public assistance issue is of particular significance to Brady.
“I really believe we have created a situation where some people aren’t willing to work, and we have to do something about it,” Brady said. “It’s a major issue in all five of our cities, and the people who live and work up here know what I’m talking about. I think the [elected officials] in our cities, and in the county, need to sit down and fix the problem.”
Before Husing’s remarks, Alejandre and Wagner both spoke of the state of education in the Victor Valley, and how schools – especially Victor Valley College, which had its accreditation reinstated in June by the Accrediting Commission for Community and Junior Colleges – can work with the local business community to help improve the High Desert economy.
