1 welcome welcome inland empire regional economic vitality conversation november 4, 2004 made...
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WELCOMEWELCOMEInland Empire Regional
Economic Vitality Conversation
November 4, 2004
Made possible through generous support from Bank of America
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Inland Empire 2004 …
Opportunities & Challenges!
John Husing, Ph.D.
Economics & Politics, Inc.
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Rancho Cucamonga Mall SiteLos Angeles County
VenturaCounty
San Bernardino County
Riverside County
San Diego County
Orange County
I-15 Freeway
Where’s The Dirt?
1. Affordable Housing & Population Serving Jobs
2. Industrial Projects & Blue Collar Jobs
3. Expensive Housing, Skilled Workers & High Paying Jobs
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137,611105,667
(152,400)
58,178
258,522290,467
396,133
Los Angeles Co. Ventura Co. Orange Co. San Diego Co. Inland Empire
Job Growth Inland Empire Advantage
Source: CA Employment Development Department
Employment Change, Southern California MarketsWhere 853,894 New Jobs Went, 1990-2004
Local Job Change 853,894, 1990-2004 … Inland Empire
39.5% of gain in Southern California’s growing areas.
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30,050
41,02537,64236,53336,775
41,483
46,008
6,3429,758
4,575
16,917
28,925
23,083
38,32540,692
56,467
49,850
40,567
33,292
24,125
29,200
22,900
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
e
2004
YTD
Source: CA Employment Development Department, Economics & Politics, Inc.
Inland Empire Job Growth Rate & Forecast, 1984-2004
IE Job Growth 2004 … Falling Short of
Forecast
29,200 Forecast at Just 22,900 Jobs?
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3.863.63
3.37 3.35 3.30
2.89 2.78 2.64 2.60
2.121.82 1.77 1.76 1.69
1.25 1.23 1.21 1.191.03 0.89 0.75 0.74 0.65 0.61 0.60 0.49
South
Caro
lina
Inlan
d Em
pire
Oklah
oma
Conne
cticu
t
Oregon
Iowa
Miss
issip
pi
Kansa
s
Arkan
sas
Utah
Wes
t Virg
inia
New M
exico
Nevad
a
Nebras
kaM
aine
Idah
o
Hawaii
New H
amps
hire
Rhode
Islan
d
Mon
tana
Delaware
South
Dak
ota
North
Dak
ota
Alaska
Vermon
t
Wyo
min
g
Note: South Carolina Ranked 26thSource: U.S. Department of Commerce
Exhibit 109.-Total Population (millions)Inland Empire As A State, July 2003
Population As A State, 2003
24 U.S. States!
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Population Growth, 2000-2020!
12,757
5,6104,401
1,677 1,588 1,334 1,313 1,213 1,207 1,070 1,060
Califo
rnia
Texas
Florida
I. Emp.
Georg
ia
Was
hingto
N. Caro
lin
Arizon
a
New Y
ork
Virgini
a
Riv. C
o.
Illino
is
New Je
rsey
Source: U.S. Bureau of Census, Southern California Association of Governments (preliminary)
Population Growth, 2000-2020Inland Empire & Top 11 States (000)
1,7641085
47 U.S. States!
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$91$84 $82
$78
$66 $65 $64$57
$50$46 $43 $43
$37 $36 $34 $33$26
$23 $21 $21 $18 $17 $15
Oklah
oma
Inlan
d Em
pire
Iowa
Kansa
s
Nevad
a
Miss
issip
pi
Arkan
sas
Utah
Nebras
ka
New M
exico
New H
amps
hire
Wes
t Virg
inia
Hawaii
Main
eId
aho
Rhode
Islan
d
Delaware
Mon
tana
Alaska
South
Dak
ota
Vermon
t
North
Dak
ota
Wyo
min
g
Note: Oklahoma ranked 29thSource: U.S. Bureau of Economic Analysis
Exhibit 110.-Total Personal Income (billions)Inland Empire As A State, 2002
Total Personal Income As State, 2002
Passed Iowa 21 States Have Less Income
21 States!!!
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$139,000
$220,000
$277,000$298,000$288,000
$427,000
$508,000
$565,000$586,000
Inland Empire Los Angeles San Diego Ventura Orange
Median All Home Price
Inland Empire Advantage
Source: Dataquick
Home Price Advantage, Inland Empire & So. California MarketsMedian Priced New & Existing Home, 3rd Quarter 2004
Stage #1:Dirt: Population & Population Serving
Job Growth
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BUILD FREEWAYS & THEY’LL COME
Don’t Build Them & They’ll Come Anyway!
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2.8%
10.3%
15.9%
22.6%
48.4%
Ventura Orange Los Angeles San Diego Inland Empire
Source: Dataquick
Share of New Home MarketSouthern California Areas, 2003 & 2004
13.4%San Bdno
35.0%Riverside
2003-2004, Inland Empire captured a record 48.4%
of Southern California’s New Home Market!
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Inland Empire Income Rank Falling
30
35
39
43 42 41
4644 44 45 45 44
46
2123
2830
32 32 32 33 3234 34 33
36
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Riverside San Bernardino
Source: U.S. Bureau of Economic Analysis
Exhibit 4.-Per Capita Income Rank Of 58 CA CountiesInland County Rank, 1990-2002
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No College Classes, 2000 SCAG 46.8% vs. 50.3% in Inland Areas
Less Than H.S.2,724,882
27.0%
High School1,995,604
19.8%Some College
2,221,75722.0%
Associate684,689
6.8%
Bachelors & Up2,460,525
24.4%
SCAG: 10,987,457
Less Than H.S.488,06725.4%
High School477,02224.9%
Some College503,54426.2%
Associate138,407
7.2%
Bachelors & Up312,25716.3%
Inland Empire: 1,919,297
Source: U.S. Census
Exhibit 10.-Educational AttainmentSCAG Area & Inland Empire, 2000
.
#1. Education #2. Blue Collar Jobs
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$3,276,000
$2,730,000
$2,730,000
$2,688,000
$2,184,000
$2,058,000
$2,016,000
$1,890,000
$1,806,000
$1,613,500
Orange-South
L.A. - North
Orange-Airport
Orange-West
Orange-North
L.A. - Mid Cities
L.A. - South Bay
LA-Central
San Gabriel Vly
Inland Empire Source: Grubb & Ellis
Industrial Space Costs, Southern CaliforniaAsking Lease Rates (nnn), 100,000 Square Feet, June 2004
Stage #2Dirt: Blue Collar Jobs
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Labor Cost Savings, 2003
-5.1%
-4.2%
-2.2%
Orange County Los Angeles County San Diego County
Average income in each sector weighted by Inland Empire employment in itCommon Occuaptions: L.A. (589), OC (562), SD (578)
Source: Occupational Employment & Wage Data, CA Employment Development Department
Exhibit 23.-Labor Cost Savings, 2003Inland Empire vs. Coastal Counties
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32.0%
923,320,496
295,912,740
186,360,263
Los Angeles County Inland Empire Orange County Inland Ratio to L.A. County
Source: Grubb & Ellis
Inland Empire Industrial Space vs. Los Angeles County Existing & Under Construction, 2003
Inland Empire Industrial Space: 32.0% of L.A. County
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BUT: Manufacturing Disappearing
(89,617)
(47,283)
(30,017)
(29,750)
(20,642)
(18,925)
(17,233)
(13,267)
(13,208)
(11,167)
(9,400)
(7,642)
Aerospace Mfg.
Electronic Instrument Mfg
Other Durable Mfg.
Computer & Peripheral Mfg.
Machinery Mfg
Textile & Apparel Mfg.
Fabricated Metal Mfg
Other Federal Government
Department of Defense
Other Non-Durable Mfg.
Printing
Accommodation
Over $40,000 a year
Source: CA Employment Development Department
Exhibit 2.-Top 12 Sectors Losing JobsSCAG Area, 1990-2003
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3. Issue: Energy Cost
12.011.0
8.9 8.57.9 7.8 7.8 7.6 7.6 7.5
5.8 5.2 5.0
Source: American Public Power Association
Industrial Electric Cents per Kilowatt/HourTop 10 States & Farl Western States, 2003
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4. Issue Workers Compensation
$10.80
$5.81$5.19 $5.10 $4.70 $4.54 $4.43 $4.34 $4.27 $4.26 $4.23 $4.13 $3.94 $3.91 $3.88 $3.76 $3.71 $3.63 $3.62 $3.61
Cal
ifo
rnia
Flo
rid
a
Tex
as
Del
awar
e
Ver
mo
nt
New
Yo
rk
Ok
lah
om
a
Haw
aii
Co
nn
ecti
cut
Ala
ska
New
Ham
psh
ire
Mis
sou
ri
Mic
hig
an
Mai
ne
Ala
bam
a
Ten
nes
see
Rh
od
e Is
lan
d
New
Jer
sey
Pen
nsy
lvan
ia
Co
lora
do
Source: Nebraska Department of Economic Development, 2004
Exhibit 6.-Workers Compensation Costs By StatePer $100 of Manufacturing Payroll, 2003
5. Only State 8-Hour Day Not 40-Hour Week for Overtime
6. Only State Mandatory Family Leave
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$597$573
$483$420
$388$384
$379$347
$334$323
$301$298
$283$278
$267$259$256
$246$243$242
SF Bay Area, CAOrange Cty, CASan Diego, CA
Honolulu, HILos Angeles, CA
Nassau/Suffolk, NY Bergen/Passaic, NJ
Boston, MANewark, NJ
Middlesex, NJWashington, DC
Monmouth, NJSeattle, WA
Sacramento, CAW. Palm Beach, FL
Inland EmpireWorcester, MA
Miami/Hialeah, FLFt. LauderdaleFLLake County, IL
California
Source: National Association of Realtors
Exhibit 8.-Median Home Price (000)Top 20 of 138 Metropolitan Areas,1st Quarter 2004
Issue 7. 16th Highest Home Prices of 138 U.S. Metropolitan Areas
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Looking Ahead: Huge Cargo Ships!
8,200 Container Post-Panamax Ships
9.5
17.1
30.3
2000 2010 2025
TEU = 20 foot equivalent unitsSource: Alameda Corridor-East Trade Corridor, 2001
Ports of Los Angeles & Long BeachContainerized Cargo, 2000-2025 (millions of TEUs)
37 Trains For Containers From One Ship
22.
.
7,755 10,859 23,387 35,314 41,403 55,233 70,09090,279
132,945159,701
178,270
237,931
300,719326,166
388,327410,924
449,786
496,777
1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Source: Burlington Northern Santa Fe Railway
Exhibit 19.-Burlington Northern Santa Fe Railway Container Lifts, 1986-2003San Bernardino, California
Design Capacity
..Needed: Expanded RR Track
Grade Crossings Intermodal Yards
Short Haul Rail
Issue 8. State Help: A Financing Mechanism
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Lane Separations: Cars & Trucks
Issue 8. Again State Help With A Financing
Mechanism
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ONT is now the only airport capable of becoming
Southern California’s second major air gateway.
0.8 1.0 2.2 2.5 2.9 3.09.6 10.8
30.0
78.0
SCI MAR PMD SBD PSP LGB BUR JWA ONT LAX
Source: SCAG Aviation Task Force Memorandum, Michael Armstrong, 2003
FIGURE 6-5.-AIR PASSENGER DEMAND2030 Constrained Demand (millions)
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Inland Air Cargo Due To Explode!
43 83 123 143 146283
821 825
2,605
3,286
JWA BUR LGB PMD PSP SCLA SBD MAR ONT LAX
Source: SCAG Aviation Task Force Memorandum, Michael Armstrong, 2003
Exhibit 17.-Air Cargo Tonnage By SCAG Area Airport2030 Constrained Demand (1,000s tons)
LAX 2003
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Logistics A Strong New Blue Collar Sector
$40,439$43,871 $45,314
Construction Manufacturing Logistics
Source: Quarterly Census of Employment Wages, CA Employment Development Department, 2004
Exhibit 13.-Average Annual Wage & SalaryBlue Collar Sectors, SCAG Region, 2003
But A Land Hog!
.
.
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Stage 3.-
Factors Driving: High Paying Work
Starting NOW!
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19%17%
14%11% 10%
Inland Empire Los Angeles Ventura Orange San Diego
Source: CA Association of Realtors
Exhibit 32.-Percent Local Residents Able To Afford Median Priced HomeSouthern California Markets, July 2004
Affordability Even An Inland Issue
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Issue 9: Housing Supply
Pricing Future Middle Class – Mostly Young, Blacks & Hispanics - Out of Housing Market
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2003 Median Incomes At/Near Beverly Hills, Including Several Cities much larger
4,39
6
72,9
94
35,3
50
10,5
11
25,2
45
146,
666
56,9
82
14,9
65
75,0
14
137,
006
70,6
63
$106
,241
$88,
851
$80,
997
$76,
755
$71,
923
$69,
640
$69,
606
$69,
397
$68,
051
$67,
455
$64,
149
Indian
Well
s
Chino H
ills
Bever
ly H
ills
Canyon L
ake
Norco
R. Cuca
mong
Murri
eta
Ranch
o Mira
g
Temec
ula
Corona
Chino
Source: Census 2000, Economics & Politics, Inc.
High Income CommunitiesInland Empire vs. Beverly Hills, 2003
31
32.0%
25.3%27.5%
23.2%
46.0%
31.0%
26.0%
47.0%
38.0%
31.0%
5% Less 10% Less 15% Less
IE to Orange Co. IE to San Diego Co. IE to LA Co. High Desert to IE Valleys
Source: San Bernardino Associated Goverments, Western Riverside Council of Governments
Exhibit 5.-Percent Willing To Work For less LocallyInland Empire Commuters, 2002
Willing To Work For Less Not To Commute?
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$286,800
$247,200
$237,600
$236,400
$234,000
$229,200
$217,200
$213,600
$205,200
$198,000
$195,600
$164,200
$152,400
West Los Angeles
Burbank-Glendale-Pasadena
North Los Angeles
John Wayne Airport
South Orange Co.
Downtown Los Angeles
San Gabriel Valley
South Bay
West Orange Co.
Central Orange Co.
Orange-North
Inland Empire
Mid-Wilshire
Source: Grubb & Ellis
FIGURE 4-5.-OFFICE COST, COASTAL COUNTIES & INLAND EMPIREAnnual Average Class "B" Lease Rates, 10,000 Square Feet, Sep-2003
Office Lease Costs, 2002
33
14.4%
14.3%
13.6%
13.4%
13.3%
13.1%
12.7%
12.5%
12.4%
12.1%
11.0%
8.8%
Orange Co.
Los Angeles
Baltimore
Washington D.C.
Toledo
Westchester
Tucson
Sacramento
Honolulu
San Diego
Inland Empire
Ventura Co. Source: CB Richard Ellis
Office Vacancy Rates, 2nd Quarter 2004Southern California & Ten Lowest U.S. Rates
Office Market, 20032nd Lowest U.S. Suburban Vacancy Rate
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Rancho Cucamonga Mall SiteLos Angeles County
VenturaCounty
San Bernardino County
Riverside County
San Diego County
Orange County
I-15 Freeway
Inland Empire: Center of the Universe?
State Needs To Create A Competitive Job Environment
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Contact:
www.johnhusing.com
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Economic Vitality Economic Vitality ConversationConversationToday’s Focus
1. What state actions will have the most immediate positive impact on California’s economic recovery?
2. What state actions will result in the most significant long-term improvement to California’s economic competitiveness and comparative advantage?
3. How do we best structure an effective partnership between the regions and the state around economic strategy?