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Why Development is Vital to the Future of a City

August 9, 2022
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Why Development is Vital to the Future of a City

In Orange County, residential development projects are proposed across California to address the state’s urgent need for accessible and affordable housing. As proposed developments reach project completion, additional housing becomes a core driver of a city’s overall economic development and subsequent business growth. The Orange County Workforce & Economic Development Division provides an overview of the importance of development to the county and why Orange County is no longer a bedroom community.

“While originally the suburban bedroom community to Los Angeles, Orange County has emerged over the last fifty years as an urbanized hub of global importance. From Disneyland to business service venues, from high-tech conglomerates to unparalleled real estate opportunities, Orange County is on the forefront of economic opportunity for over three million people,” states the Orange County Workforce & Development Commission (OCWDC).

“Orange County is in a much different place in its economic development life cycle than it was fifty, twenty or ten years ago. Orange County is no longer about attracting population and businesses from outside the County to move into a new territory but is instead becoming a place where success is dependent on retaining and growing existing businesses and economic clusters,” explains the OCWDC. “Growing our own companies, jobs, and future workforce is how Orange County will succeed, rather than working to attract the resources from outside the county.”

Commercial developments address economic growth and workforce development needs in Orange County. However, addressing housing shortages through residential project developments is of key importance to allow commercial developments, and the community, the opportunity to thrive. Current and prospective employees need opportunities to live where they work to encourage employee retention and growth, and housing developments provide this needed resource.

In Brea, proposed commercial and residential project developments address the need for housing, economic development, and workforce success for the city’s growth. The Brea Chamber of Commerce takes a further look at the city of Brea and what it means to prioritize commercial and residential developments to address the needs of housing, worker shortages, and business growth – and why it is of utmost importance to Brea’s future to understand and support the need for new development in Brea.


A Look at Brea: Housing Projects Address Workforce Shortages

When addressing employee shortages in the workplace, considerations of an employee’s accessibility to nearby housing is important as housing availability close to the workplace has a direct correlation to employee retention and future business growth. Housing that is affordable, accessible, and near the location of an employee’s job is known as workforce housing. According to the Orange County Business Council, workforce housing is also defined as “the necessary infrastructure that Orange County and its cities must provide to house current and future employees of every income category.”

The residential population of Brea is about 47,796 persons, however, Brea’s daytime population swells to approximately 120,000 persons, as workers flood the city from outside the area to access their jobs. This data is based on the BREA 265 Environmental Impact Report, as the housing demand in the city is currently jobs-rich, with 2.98 jobs per housing unit (Impact 5.14-1). As there are approximately 17,471 households in the city with about 2.75 persons per household, and 2.98 jobs per housing unit, the average daily workforce population comes out to approximately 120,000 persons, after factoring out children ineligible to work. Despite the recent trend of some companies going remote with their workers, Brea still experiences a significant daily influx of much needed workers from outside the area. As the daytime population influxes to approximately 120,000 persons, traffic through commuters increases during the workweek, which would be reduced given an increase of workforce housing to decrease commute times and offer workers opportunities to live where they work.

Additional residential developments proposed in Brea recognize the shortage of housing available and provide workers and families the opportunity to live where they work, decrease commute times, decrease traffic, and contribute to a community they want to be a part of through spending and usage of city services. By providing additional housing opportunities through project developments, issues of worker shortages are alleviated as additional housing encourages a community to live where they work instead of finding work elsewhere.

According to the 2019 Workforce Housing Scorecard published by the Orange County Business Council “there is a high demand to live and work in Orange County,” states OCBC. “However, Orange County’s strong, unrelenting job creation is vastly outpacing the production of new housing in the region. There is a persistent, insufficient supply of new housing to meet even the needs of the existing county workforce.”

The increasing supply of job production in Orange County is troublesome as the lack of affordable and accessible workforce housing to the younger generation of workers leads to demographic trends of outmigration. In addition, undersupply of housing drives up high pricing due to demand, further encouraging the younger workforce population to leave the county to find accessible housing and workforce opportunities elsewhere. The impacts of the workforce population leaving due to lack of housing includes workforce shortages and high employee turnover rates, which impacts a business’s ability to offer quality services to the community and be profitable to succeed long term.

According to the OCBC, “between the years of 2010 and 2018, Orange County’s population increased by 210,871 while its housing supply increased by only 48,051 units. This means that Orange County has added only one housing unit for every four new residents.”

According to Figure 2.1, Orange County Housing Unit Growth by City, presented by the OCBC from data sourced by the California Department of Finance, Demographic Unit, Brea’s population has increased between the years of 2010-2018 without a significant increase in the available supply of housing units.

In addition, data from Figure 2.3 shows that Brea has had significant job growth to the region from 2010-2018 without an increase in new housing unit construction to meet this growth.

To address the increased demand for housing due to a city’s population growth is to prioritize new residential development projects in Brea. When housing shortages are addressed, outmigration of workers is decreased, housing opportunities are prioritized, and workforce development increases. However, workforce development is not the only benefit of new residential development projects. Once additional housing is provided to a city’s resources, the outcomes of housing projects include increased economic and business development to the community, which provides the opportunity for commercial developments to thrive, and the residents to enjoy decreased traffic and increased affordability for workforce housing.

Currently, the output of jobs available in Brea is quickly outpacing the availability of housing to accommodate the job increase. Demand for workforce housing to accommodate the increase of jobs is a core driver of increased rental and home prices in the area. As more housing is available to accommodate the influx supply of jobs, the demand for workforce housing decreases and subsequently lowers the cost of rentals and homes. To decrease the high cost of rent, additional housing supply will provide an influx of housing opportunities to decrease the cost of living and provide young professionals and other workers with the affordable option to live where they work. To accommodate the rising population and increased job opportunities, additional housing is a must to lower demand and balance the city’s jobs to housing ratio.


The Business and Economic Benefits of New Development in Brea

As residential developments prioritize workforce and housing shortages, the additional housing provided increases a city’s economic and business development. When Orange County’s increased population moves to a city such as Brea due to the increase of accessible and available housing, the new residents contribute to the city’s local economy through consumer spending and can live where they work and engage in local workforce opportunities. When employees are provided the opportunity of workforce housing, new commercial developments have increased opportunities to hire locally.

Demographic data from the City of Brea states that the current median household income is estimated at $101,228 and most earnings are spent on shelter, transportation, food and beverages, health care, and utilities. The median household spending expenditure is $78,437. People spend money where they live, and by increasing housing supply in the area, overall consumer spending increases as new residents join the community and contribute to the local economy by the convenience of spending local. When additional housing opportunities are available, new residents spend their money within the city.  This spending means new residents contribute to local businesses and increase the city’s economy and tax revenue while contributing to business growth.

Like new residential developments, commercial developments provide additional job opportunities to the city’s workforce, offer growing business opportunities, and add additional services and spending to the community as their workforce eats, buys gas, and shops within Brea. In this way, commercial developments improve the local economy, improve infrastructure, and provide for a growing community by growing the tax base that allows the city to fortify services to residents.

The Brea Chamber of Commerce serves as an advocate for business growth in Brea and is dedicated to improving the economic vitality of the city of Brea. Because of the broad and deep economic benefits of new development to Brea, the Chamber of Commerce encourages community members to make sure to educate themselves on the economic and workforce advantages of supporting additional commercial and residential developments in the city for business growth and the protection of Brea’s future.


What Happens If We Don’t Embrace New Development?

Although there are important long-term benefits to a city’s economic growth by supporting local housing developments, opposition towards additional housing can impact the ability of a developer to move a project forward to completion. When a community rejects new housing brought forward to a city, the long-term impacts of leaving housing supply shortages unaddressed can have consequences to a city’s economic growth and thriving future.

Community voice in local government is an important right for citizens who contribute to the city they live and work in. However, personal interests leading the voice behind anti-development with a lack of knowledge on the bigger picture often results in unintended consequences. Two unfortunate trends that can have long-term consequences on a city’s economic growth and community development are loss of workforce and loss of local control.

Many cities in more affordable areas are seeing younger people leaving nearby cities due to the lack of appropriate housing developments. These cities in more affordable areas are deliberately developing their cities to attract these young people with affordable housing, higher education options, a diverse job market, and community amenities that young people want and can reasonably afford. These cities are keeping up with housing and development demand while attracting residents from nearby cities to migrate toward an accessible future. Outmigration from a high-cost city to one that provides opportunities through workforce and housing developments draws economic vitality away from cities higher-priced housing. If a city does not embrace development, another municipality will, and the workforce will slowly disappear.

Secondly, another byproduct of anti-development sentiment is the loss of local control. Currently, the state of California is working to mandate certain types of development without local voices involved. When cities stop housing projects and development, not only is economic vitality and workforce impacted, but also our local voice in development. The Brea Chamber of Commerce is for local control and embraces government closest to the people. To maintain this, we must embrace the things that make our community thrive and that secure our future, and that includes understanding and supporting new developments and recognizing the importance they bring to the future of the community.

Dr. Christopher Thornberg, PhD, is the Founder of Beacon Economics LLC and Director of the UC Riverside School of Business Center for Economic Forecasting and Development. As an expert in economic and revenue forecasting, regional economics, economic policy, and labor and real estate markets, Thornberg provides his perspective on development and the consequences of anti-development.

“Anti-development sentiment can thwart a city’s ability to move forward with important projects vital to local economic development,” said Thornberg. “In California, the inability to build housing of all kinds is the most pressing problem. It degrades affordability and the result is a “brain drain” of young talent moving to areas that offer more housing and other amenities. This slows economic growth, as well as investment in local schools, infrastructure and public services as the tax base erodes with the loss of workforce. Businesses are impacted and are forced to move where workers are relocating. These are some of the reasons we see workers and businesses choosing other states to work and do business.”

The state of California has an overall housing shortage, not just a shortage of affordable housing. The lack of housing in general is what has caused housing unaffordability across the entire state. Affordability is directly related to lack of housing and the only way to increase affordability, is to increase housing, which leads to economic growth and workforce development.

The Brea Chamber of Commerce is a resource for residents and businesses in Brea. Feel free to visit SOURCE – your online information resource – often for facts, trends and information that is important to your city and the community.

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