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COUNTY ECONOMIC REPORT

VENTURA

Prepared by: Matthew Fienup, Ph.D. California Lutheran University For questions regarding this report, please contact: Kevin Kane, Ph.D. Associate Regional Planner Research & Analysis Southern California Association of Governments 900 Wilshire Blvd., Ste. 1700 Los Angeles, CA 90020 (213) 236-1828 [email protected] www.scag.ca.gov

COUNTY ECONOMIC REPORTSVENTURA

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State of Ventura County’s Economy

The dominant economic story in Ventura County is a continued decline in total economic activity. The

California Lutheran University Center for Economic Research & Forecasting (CERF) hesitates to the use

the word “recession,”, but we don’t know what else to call two consecutive years of economic

contraction.

A year ago, we reported on the Commerce Department’s September 2017 Gross Domestic Product

(GDP) by Metropolitan Area data release. It indicated that Ventura County’s economy shrank by nearly

3.0% in 2016. We had forecast growth of 1.8%. The massive delta between our forecast and the U.S.

Bureau of Economic Analysis’s (BEA) initial growth estimate left us stunned. Thankfully, this past

September, the 2016 GDP number was revised closer to zero. Ventura County’s economy is now

estimated to have contracted by only 0.9% in that year. Unfortunately, the revision to 2016 was

accompanied by an initial estimate of 2017 economic growth that was also negative. Ventura County’s

economy is estimated to have contracted by an additional 0.4% in 2017.

Source: U.S. Bureau of Economic Analysis

If we remove the two highly volatile sectors of agriculture and natural resource extraction, the County’s

economic decline appears slightly larger. Non-farm, non extraction GDP declined by 1.0% in 2016 and

0.6% in 2017.

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Sources: U.S. Bureau of Economic Analysis and CERF

Average economic growth over the past four years rounds to 0.0%, the worst four-year period for which

we have data.

While job growth remains positive in Ventura County, sectoral data give little support for optimism. Jobs

in construction, the fastest growing sector over the past year, increased by nearly 10% during the year,

but are still down nearly 6.0% since the onset of the Great Recession. The sector with the second largest

gain during the past year, Leisure & Hospitality, is a very low paying sector that does not provide the

income households need to live locally. Increases in Leisure & Hospitality jobs contribute to the tens of

thousands of commuters crossing the County line each day as workers sort between homes they can

afford and places of employment. Jobs in Leisure & Hospitality are up more than 20% over the past ten

years. Meanwhile, jobs is Manufacturing, which account for more than 23% of the County’s total

economic output, continue to slide with little hope of relief on the horizon.

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250,000

260,000

270,000

280,000

290,000

300,000

310,000

320,000

Ventura County Non-Farm Jobs

Source: CA Department of Employment Development

Whether you look to jobs or GDP, the state of the Ventura County economy is weak.

We trust large employers when they communicate what is driving Ventura County’s economic malaise.

At a Business Outlook Conference in Thousand Oaks, CA in October 2018, leaders from the County’s

three largest manufacturing firms all agreed that a growing housing affordability crisis and the inability

to attract and retain talent are the single biggest constraints on economic activity in Ventura County.

The dominant factor influencing affordability in Ventura County is housing supply. We simply don’t build

enough. As such, real estate appreciation in Ventura County should not be interpreted as an indicator of

economic strength. In fact, the County’s real estate appreciation is proceeding at a rate greater than

wage growth, further limiting the ability of employers to attract and retain talent and altering business

location and expansion decisions. In this way, real estate appreciation is having an insidious effect on

the regional economy.

We note once again this year that Ventura County’s chronic lack of new construction is driven by a set of

urban growth policies, known as Save Open Space and Agricultural Resources (SOAR), which rank as the

most stringent growth restrictions in the nation. These crushing, anti-growth measures, passed in the

late 90s, are lately revealing their lasting economic impact. We urge extreme caution on the part of

communities in San Diego County that, as we understand, are considering SOAR-style policies of their

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own: if you model your land use policies after Ventura County, don’t be surprised if you get Ventura

County’s economic track record too.

One forward-looking indicator of economic activity that we track carefully is net domestic migration,

which simply takes the number of people moving into a particular geography from another area of the

country and subtracts the number of people leaving that geography for another area. We believe that

net domestic migration flows capture the relative economic opportunity available in different areas.

When economic opportunity is relatively high in one area, people flow in. When opportunity is relatively

low, they flow out.

Source: California Department of Finance

Ventura County currently exhibits negative net domestic migration. Last year, more than 3,700 more

people left Ventura County for another region of the United States than came to Ventura County from

another region. In Ventura County, net domestic migration seems to be highly correlated with housing

affordability. When relative affordability declines, net outmigration accelerates. Aside from natural

volatility, we are forecasting that the net outflow of productive, working-age adults is accelerating.

There is simply more opportunity somewhere else.

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Another important economic indicator is growth of the civilian labor force. In 2017, the size of Ventura

County’s labor force shrank for the fifth consecutive year. Two years ago, we began to take special

notice of labor force changes. In 2016, the County had recorded its third consecutive year of labor force

contraction. At the time, our forecast of economic growth for the County was still positive. The

coincidence of a contracting labor force and expanding economic activity led us to note that the

County’s sustained decline in the size of the labor force was “unprecedented for a non-recessionary

economy.” One year later, we learned that there was nothing unprecedented about the County’s

situation; Ventura County was indeed experiencing recession.

For 2017, the rate of contraction of the County’s labor force slowed to near zero. We believe that this

portends economic growth of near zero.

One year ago, we used this space to plead with local policy makers to treat the year’s shocking economic

growth numbers as a wakeup call. We are happy to report that policymakers in a few corners of the

County appear to have responded. Efforts in the City of Thousand Oaks warrant special mention. Over

the past year, the Thousand Oaks City Manager’s Office initiated a comprehensive residential capacity

analysis that carefully studied the Land Use Element of the City’s General Plan. The Thousand Oaks City

Council then voted to approve general plan amendments that make residential capacity available for

infill development along major transportation corridors, including Thousand Oaks Boulevard and the 101

Freeway. This concerted effort by policymakers in Thousand Oaks to address the region’s housing

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shortage is a real bright spot in the County and represents tangible progress in addressing the challenges

faced by local communities.

Industries and Occupations

One year ago, we reported that Ventura County had finally recovered its pre-recession level of jobs.

Ventura County was the last county in Southern California to achieve this milestone. Even with a decade

of very slow population growth, the per capita level of jobs still had not fully recovered. This year, we

can report that Ventura County has finally recovered its pre-recession per capita level of jobs.

Unfortunately, despite the addition of over 3,000 new jobs in the past 12 months, the size of the

County’s labor force shrank for the fifth consecutive year.

The coincidence of sustained job growth and a shrinking labor force underscores a major compositional

transformation that has taken place in Ventura County’s labor market. Since the Great Recession, jobs in

high-paying sectors generally, and goods producing sectors especially, are in sustained decline. Jobs in

these sectors are moving out of the County and often out of California in search of lower costs and more

business-friendly environments. Meanwhile, jobs in low paying, service-oriented sectors are on the rise.

Jobs in Agriculture, Natural Resources & Mining, Non-Durable and Durable Goods Manufacturing,

Information & Technology, and Financial Activities are all down double digits in percentage terms since

the Great Recession. Education & Health Services and Leisure & Hospitality have seen explosive job

growth, up 37%and 22%, respectively, over the past ten years. Explosive gains in low paying sectors have

dominated the sustained losses in high-paying sectors and the net result has been a steady increase in

the number of jobs in the County.

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Compositional changes to the labor market have important social implications. Net job gains are

concentrated in industries where salaries do not pay enough that workers in these jobs can afford to live

inside the County. According to data from the California Association of Realtors, the median single

family home in Ventura County is now 13.1 times the average salary in Healthcare and Social Services,

17.7 times the average salary in Educational Services, and 31.6 times the average salary in

Accommodation & Food Services. Each of these ratios is up over last year. Without substantial, almost

unimaginable, improvements in housing affordability, Ventura County’s future is one of an increasingly

bimodal economy, an economy of haves and have nots, of wealthy residents of the County and a large

commuter population that enters the County each day to work in low wage jobs.

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Among the high economic value added sectors, Construction is a bit of a bright spot this year. Although

it is still down nearly 6% from pre-recession levels, Construction added 1,500 jobs in Ventura County

between September 2017 and September 2018, an increase of 9.3%. Admittedly, much of this may be

the result of the devastating wildfires that began on the evening of December 4, 2017. The Thomas Fire

destroyed over 1,000 homes in Ventura County. Fresh two-by-fours are finally beginning to appear,

popping up out of a devastated, ash-covered landscape. Rebuilding will last well beyond 2019 as a

significant percentage of the affected residents (we are told as much as 25% in some neighborhoods)

have walked away from their properties and are choosing to sell rather than rebuild. A whole new

generation of owners will do much of the rebuilding in the years ahead.

Durable goods manufacturing also enjoyed net job creation over the past 12 months, with

approximately 200 jobs added. This does little to make up for the 4,700 jobs lost in this sector since the

Recession. We welcome any incremental gains, however, that the County can secure in high value

sectors.

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The County’s unemployment rate currently sits at 3.6%, the lowest rate recorded since 1990. The

unemployment rate in Ventura County has declined continuously from a rate of 9.9% in 2012 as the

County’s labor force shrank each of those five years. When considering the unemployment rate, it is

important to distinguish between the effect of firms creating net new jobs and the effect of discouraged

workers leaving the local labor market. Unfortunately, as jobs in higher paying sectors leave the County,

many workers are fleeing too in search of economic opportunity somewhere else. This exodus explains

much of the decline in the unemployment rate and also underscores a weak County economy.

Demographics and Education

Aside from the volatility that is expected from a geography of this size, we see evidence of continued

slowing in population growth. Because net domestic migration out of the County slowed over the past

year, Ventura County’s population grew at a slightly higher rate in 2017 than in the previous year.

Ventura County’s population growth rate was 0.29% in 2017, a number higher than the previous year

but still almost indistinguishable from zero. Only two times over the history for which we have data has

the County’s population growth been slower. One was in 2016, when the population grew at the lowest

rate ever recorded, which was 0.17%. The other was in 2005 at the height of the housing bubble when a

mania-induced surge in home prices and a resulting steep decline in housing affordability drove people

away from the area in record numbers.

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Meanwhile, although it has been fairly stable since 2010, international migration to Ventura County is

still very low relative to the average from 2000 to 2010. As a result, net total migration was negative for

a third straight year.


Given the economic headwinds in the County, we continue to wonder if Ventura County will see

negative population growth in the near future.

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As noted previously, Ventura County’s population continues to age more rapidly than comparable

geographies. Whereas the median age in Ventura County was higher than the State of California’s in

2000 and lower than the nation’s, Ventura County’s median age is now higher than that of either of

these larger geographies. Over the past 17 years, the share of Ventura County’s population that is over

age 65 has increased by 4.8%. Over that same period, the share increased just 3.2% in the United States

and 3.0% in California. While it might be tempting to think that there is something in the water and that

Ventura County residents physically age more rapidly than others, this demographic shift is the simple

and logical result of the labor market composition changes and negative net domestic migration

discussed above.

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Compared to other statistics, data on educational attainment in Ventura County seems relatively

favorable. The share of the population with a bachelor’s degree in Ventura County is comparable to

California’s and higher than that of the United States. Educational attainment is high and increasing in

Ventura County.

Ventura County continues to produce significantly more college graduates than jobs for college

graduates and recent graduates are likely to be counted among those leaving the County each year in

search of opportunity somewhere else. These graduates, along with thousands of other working age

adults who make up Ventura County’s net out migration, are the building blocks of economic growth

and prosperity in other parts of the country.

Educational Attainment

Education Attainment in Persons > 25 Years

HS Diploma BA or Higher HS Diploma BA or Higher HS Diploma BA or Higher

2005 84.1% 27.2% 80.1% 29.5% 83.0% 29.8%

2010 85.6% 28.2% 80.7% 30.1% 82.1% 30.8%

2015 87.1% 30.6% 82.2% 32.3% 82.9% 32.7%

2016 87.5% 31.3% 82.4% 32.9% 84.1% 33.6%

2017 88.0% 32.0% 83.3% 33.6% 85.1% 33.4%

Source: U.S. Bureau of Census (ACS 1-year estimates)

United States California Ventura County

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Incomes and Poverty

On average, Ventura County residents enjoy higher incomes than those of the United States or

California. Just over 40% of Ventura County households have incomes greater than $100,000, compared

to 36% for the State and only 28% nationally. Both average and median household incomes in Ventura

County are significantly higher than those of the United States and California. In 2017, Ventura County’s

median household income was $82,857, compared to $71,805 for California and $60,336 for the United

States. Although incomes are higher in Ventura County than the comparison regions, income growth

was slower over the past year. Ventura County’s median income increased just 3% between 2016 and

2017. Median income grew 5% in the United States and 6% in California.

It is important to consider these income statistics in the context of each geography’s cost of living.

Currently, according to CAR data, the median home price in both California and Ventura County is 7.7

times the median income. By comparison, the median home price in the U.S. is just 3.9 times the

median income. Higher incomes in both Ventura County and California are more than offset by

increased costs of living.

Educational Attainment Detail 2017

United States % California % Ventura County %

Estimated Pop Age 25+ by Edu. Attainment 221,250,083 26,679,273 574,375

Less than 9th grade 11,267,058 5.1 2,459,993 9.2 53,086 9.2

9th to 12th, no diploma 15,315,153 6.9 1,989,309 7.5 32,222 5.6

High School Graduate (includes equivalency) 60,031,545 27.1 5,541,182 20.8 109,984 19.1

Some college, no degree 45,109,653 20.4 5,641,881 21.1 134,545 23.4

Associate's degree 18,760,759 8.5 2,070,661 7.8 52,473 9.1

Bachelor's degree 43,585,028 19.7 5,616,449 21.1 125,636 21.9

Graduate or professional degree 27,180,887 12.3 3,359,798 12.6 66,429 11.6

Hispanic/Latino 33,474,043 8,921,445 210,445

High school graduate or higher 22,996,034 68.7 5,778,718 64.8 140,178 66.6

Bachelor's degree or higher 5,360,591 16.0 1,158,918 13.0 27,509 13.1


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Ventura County’s higher incomes are accompanied by lower rates of poverty than either the United

States or California.

Ventura County poverty rates are both lower and more stable. Although poverty rates declined over the

past year in both California and the United States., they held steady in Ventura County. Since the Great

Recession-high level of poverty, Ventura County’s poverty rate has declined just 1.2%. Over the same

period, the national poverty rate declined 1.9% and California’s dropped 2.5%.

Income and Income Distribution 2017

United States % California % Ventura County %

Estimated Households by HH Income 120,062,818 13,005,097 272,085

Income < $10,000 7,804,083 6.5 663,260 5.1 8,435 3.1 Income $10,000 - $14,999 5,402,827 4.5 559,219 4.3 7,890 2.9 Income $15,000 - $24,999 11,165,842 9.3 1,027,403 7.9 18,502 6.8 Income $25,000 - $34,999 10,925,716 9.1 988,387 7.6 18,230 6.7 Income $35,000 - $49,000 15,247,978 12.7 1,417,556 10.9 26,664 9.8 Income $50,000 - $74,999 21,131,056 17.6 2,080,816 16.0 42,445 15.6 Income $75,000 - $99,999 15,007,852 12.5 1,599,627 12.3 40,813 15.0 Income $100,000 - $149,999 17,529,171 14.6 2,132,836 16.4 50,064 18.4 Income $150,000 - $199,999 7,563,958 6.3 1,092,428 8.4 26,392 9.7 Income $200,000 + 8,284,334 6.9 1,443,566 11.1 33,194 12.2

Estimated Average Household Income $84,525 $101,761 $110,266

Estimated Median Household Income $60,336 $71,805 $82,857

Source: US Census Bureau, 2017 ACS 1-year Estimates

Poverty and Income, 2017


Poverty

People of All Ages in Poverty 13.4% 13.3% 9.5%

Median Household income 60,336 71,805 82,857

Per Capita Income 32,397 35,046 36,907

Source: U.S. Bureau of Census (2017 ACS 1-year estimates)

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It is important to distinguish between a low poverty rate and abundant economic opportunity, which

lifts people out of poverty. The evidence is that Ventura County lacks economic opportunity. In Ventura

County, upward economic mobility often requires leaving the County for lower cost, more generous,

and more growth-friendly environments.

Consider the Brookings Institution Metro Monitor. The 2018 Metro Monitor report, which considers the

100 largest metropolitan areas in the nation, ranks Oxnard/Ventura/Thousand Oaks 71st for economic

growth during the past ten years. Thousand Oaks and the surrounding metro area ranked 75th for

economic inclusion, which is a measure of whether economic opportunity and prosperity are widely

shared by residents living at various income levels within an area. High economic inclusion corresponds

to high economic opportunity and upward mobility. In other words, Ventura County ranks in the bottom

quarter of the 100 largest metro areas for inclusion. By comparison, the Los Angeles/Orange County

metro area is ranked 63rd for economic inclusion. San Jose/Sunnyvale is ranked 39th. All of these are

bested by Fresno, which is currently ranked number 38th.

Poverty and Income

People of All

Ages in

Poverty

Median

Household

income

Per Capita

Income

People of All

Ages in

Poverty

Median

Household

income

Per Capita

Income

People of All

Ages in

Poverty

Median

Household

income

Per Capita

Income

2005 13.3% 46,242 25,035 13.3% 53,629 26,800 9.9% 66,859 29,634

2010 15.3% 52,250 26,059 15.8% 57,708 27,353 10.7% 71,864 31,135

2015 14.7% 55,775 29,979 15.3% 64,500 31,587 9.6% 80,032 34,226

2016 14.0% 57,617 31,128 14.3% 67,739 33,389 9.5% 80,135 35,298

2017 13.4% 60,336 32,397 13.3% 71,805 35,046 9.5% 82,857 36,907



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Source: 2018 Brookings Metro Monitor (https://www.brookings.edu/research/metro-monitor-2018/)

Housing Markets

“Location, location, location” is a familiar refrain in real estate. Ventura County has location. It is a

south-facing beach county that is home to coastal as well as inland getaways and national parks. It is a

gateway to the Channel Islands and a gateway to Los Padres National Forest. As mentioned above, it is

also home to the most stringent urban growth policies in the nation, underscoring a powerful anti-

development sentiment among its residents and ensuring a chronic shortage of new construction.

Despite declines in total economic activity and a net out-migration of people, housing prices continue to

rise in Ventura County. According to DataQuick, median existing single-family home price in Ventura

County in June of this year reached a post-recession high of $605,000. This nearly matches the pre-

recession high of $619,000 reached in June 2016. The median new home price has now exceeded pre-

recession highs, although it is still lower in real terms than the bubble pricing of 2005 and 2006.

https://www.brookings.edu/research/metro-monitor-2018/

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Source: California Association of Realtors

As a result of property value growth that has exceeded income growth, housing affordability is low

relative to the nation and many other communities in the State. The County’s affordability rate was 31%

just two years ago, but is down to 28% for the most recent year. Just 28% of home buyers can afford the

median priced home. Our 28% affordability rate compares to 53% for the nation. That difference

represents a significant competitive advantage for communities in other parts of the country, which are

competing to become the new home for jobs in high-paying sectors as they leave Ventura County.

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In the 1980s through the 2000s, Ventura County was the flagship economy in the Tri-County region

comprised of San Luis Obispo, Santa Barbara, and Ventura Counties. Ventura County’s per capita GDP

was dramatically higher than that of either San Luis Obispo County or Santa Barbara County. Its median

family income was significantly higher. Ventura County compared favorably to other affluent California

areas outside of the Tri-Counties as well.

Housing Affordability: 2018 Quarter 3

The percent of home buyers who can afford the Median-priced home

Type Affordability (%) Median Home Price

Major Regions

United States single-family 53 $266,900

California single-family 27 $588,530

California condo 35 $479,390

Los Angeles Metro Area single-family 30 $526,000

Inland Empire single-family 41 $362,500

San Francisco Bay Area single-family 21 $950,000Bay Area Communities

Alameda single-family 18 $950,000

Contra Costa single-family 32 $660,000

Marin single-family 19 $1,300,000

Napa single-family 24 $729,500

San Fransisco single-family 15 $1,600,000

San Mateo single-family 14 $1,600,000

Santa Clara single-family 17 $1,300,000

Solano single-family 38 $455,000

Sonoma single-family 22 $660,000Southern California Communities

Los Angeles single-family 22 $628,940

Orange single-family 20 $830,000

Riverside single-family 37 $405,000

San Bernardino single-family 48 $294,900

San Diego single-family 23 $650,000

Ventura single-family 28 $665,000Coastal Communities

Monterey single-family 20 $622,000

San Luis Obispo single-family 21 $640,000

Santa Barbara single-family 26 $599,500

Santa Cruz single-family 12 $903,000Central Valley Communities

Fresno single-family 46 $275,060

Kern single-family 53 $246,000

Kings single-family 51 $230,000

Madera single-family 48 $260,000

Merced single-family 40 $276,320

Placer single-family 42 $480,000

Sacramento single-family 42 $370,000

San Joaquin single-family 38 $370,000

Stanislaus single-family 45 $319,900

Tulare single-family 47 $239,900

Source: California Association of Realtors

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The latest data indicate that this appears to be changing. Per capita income has stalled and we believe

that the most plausible forecast is for this to continue. In addition, Ventura County’s nonfarm job

growth since October of 2007 has been the second slowest across the 28 larger metropolitan areas in

the state. Job growth is forecasted to be slow relative to the State throughout the forecast horizon.

Sources: U.S. Bureau of Census and U.S. Bureau of Economic Analysis

What does this have to do with housing markets? The economic strength that normally drives housing

market demand has been pulled out from under the housing market in Ventura County. Most

economists agree that the economy, jobs, and income generation are very important to housing sales.

The weakness in Ventura County’s economy, and just as important, the creation of jobs in mostly low-

paying industries, creates a drag on home sales volumes and price appreciation. This will slow the

housing market, which is not a great thing, as Ventura County’s housing market is already weak and has

been weak for ten years now. The dourness of an already anemic housing market will likely continue.

In addition, changes to the economy at the national level are expected to contribute to slower Ventura

County housing markets. The Federal Reserve has raised short-term interest rates for almost three years

now. The 30-year fixed conventional interest rate has reached 4.8%, an 88-month high and 140 basis

points higher than two years ago. We forecast these rates will continue to gradually climb to roughly

5.75% by mid-2020. Using CAR median home price data for the third quarter of 2018, the monthly

payment for a median priced home would rise from about $2,100 at 3.4% to about $2,725 at 5.75%,

representing a 30% increase in the monthly mortgage payment associated with the median house.

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Sources: U.S. Freddie Mac and CERF

With this, we forecast that Ventura County housing markets will be sensitive to rising mortgage rates.

Anecdotally, realtors in certain communities are telling CERF that they have seen buyers evaporate and

that they expect prices to be down 3-4% next summer compared with the summer of 2018.

Ventura County building activity has been very slow for many of the years since the Great Recession.

There has been a confluence of new housing projects that have made their way through the planning

stages in various Ventura County cities and in unincorporated areas of the County and there was a bit of

a jump in permits granted in 2017. We had thought that 2018 permit flows would be similar to 2017, but

year-to-date data through August shows that activity has been significantly lower than 2017.

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Sources: Construction Industry Research Board and CERF

As we have emphasized many times before, low construction rates contribute to a weak economy. New

buildings have a large multiplier effect with collateral increases in economic activity in many other

industries. These benefits have not been present in the County for many years and, unfortunately, did

not materialize in the County in 2018. Moreover, the chronic shortage of new construction and the

resulting housing affordability crisis has driven, and will continue to drive, jobs from the region.

A dramatic lack of supply is present in both ownership and rental markets in Ventura County. Apartment

markets continue to experience very low vacancy rates and rising rents. The July 2018 countywide

overall weighted average vacancy rate was 2.7%1 and apartment vacancy rates in some County

submarkets are less than 1%. The average monthly rent across all property types was $1,954, which is

greater than mortgage payments for a house in many locations elsewhere in the United States. The July

rent was 3.2% greater than July of 2017, which was in turn 5.7% greater than July of 2016.

These data make sense. With a ten-year bear market in housing construction, housing supply is limited,

and those who choose to stay in the County must necessarily bid up apartment rents.

1 Source: the Dyer-Sheehan Group generously provide apartment market data to CERF.

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Source: The Dyer Sheehan Group

We forecast that Ventura County existing home sales and median price growth will slow. The slowing

expected in the next two and a half years is on top of slowdowns that have already begun in prices.

Sales will slow from the relatively stable levels that occurred in 2015, 2016, and 2017.

Sources: California Association of Realtors and CERF

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Sources: California Association of Realtors, U.S. Bureau of Labor Statistics, and CERF

This forecast will be optimistic if mortgage rates rise faster than we predict or if the County’s economy

slows relative to our forecast. The forecast will be pessimistic if mortgage rates stay where they are or

fall or if the County’s economy booms. We believe that our forecast is at greater risk of being optimistic

than pessimistic. This stems from the reality that a positive, unexpected shock to the local economy, like

a large new company moving into the County to setup operations, is exceedingly unlikely. As alluded to

above, even if a large employer did want to move to Ventura County, punishing urban growth restriction

policies equip an aggressive anti-growth constituency with everything that they need to thwart such a

development, and make no mistake, that aggressive anti-growth constituency would not welcome a

large new employer and the resulting influx of people and other economic resources.

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Source: DataQuick / CoreLogic


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Ventura County’s Forecast

2017 marked a second consecutive year of economic contraction for Ventura County. Average growth

over the past four years is 0.0%, representing the worst four years for which we have data. Continued

declines in the size of Ventura County’s labor force and an accelerating net migration of people out of

the County give us little reason to believe that Ventura County’s economy will return to robust growth

any time soon.

The current forecast anticipates that the County’s economy will neither grow nor contract in 2018, with

forecasted growth of 0.0%. This would extend the current four-year long period of zero growth to an

astonishing fifth year. Our forecast for growth in 2019 and 2020 is positive, but very low, averaging just

0.38% over those two years.

We believe that slow population growth has come to stay in Ventura County. Young adults who are

starting careers and families are often selecting to move out of Ventura County to do so, often times

choosing to move out of California. This means that Ventura County will forego the high economic

productivity of individuals undergoing household formation and career development.

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Sources: U.S. Bureau of Census and CERF

We continue to forecast negative net domestic migration, which most analysts would not argue with.

We forecast, however, that it will worsen. This might seem to be a puzzle given that home price growth

is forecasted to slow.

Sources: U.S. Bureau of Census and CERF

The main explanation here is job growth. With a weak economy and growth-inhibiting economic

development policies, Ventura County job growth will be slow. Sectors with net increases in jobs will

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continue to be lower paying sectors. This, of course, implies greater domestic population flows out of

Ventura County to other counties in the nation.

We forecast average annual job growth of 1% during the three years from 2018 through 2020. This is

historically slow job growth, especially considering that the economy is in a period of expansion.

Sources: CA Department of Employment Development and CERF

Our job growth forecast might be pessimistic. What could happen is that the 1.3% or 1.4% rates

recorded in 2016 and 2017 are repeated in 2019 and 2020, despite GDP growth that is slower. This

would necessarily be marked by job creation in lower paying industries, industries that do not contribute

well to overall GDP.

Economists believe that job and GDP growth are ultimately linked. For short periods of time, a year or

even over a few, they can be disentangled, however, in the longer run, they will move together. If GDP

growth hovers near zero, as we are forecasting, then job growth will eventually slow as well. For this

reason our jobs forecast might be optimistic.

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Sources: CA Department of Employment Development, U.S. Bureau of Economic Analysis, and CERF

Sources: CA Department of Employment Development and CERF

Ventura County’s long-term occupational forecasts foresee a continuation of compositional changes

that are already well underway.

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Jobs in tradable goods production will continue to decline. Jobs that can be conducted somewhere else

at lower cost will continue to leave Ventura County. Jobs in non-tradable services, jobs that must be

completed in proximity to the individuals paying for those services, will continue to increase. We

anticipate continued job growth in the following occupational sectors: Education & Training; Health Care

Practitioners and Health Care Support; Food Preparation & Food Serving jobs; and Personal Care &

Service. Production, Extraction, and the Management associated with these are anticipated to be among

the fastest shrinking occupations.

The CERF Ventura County economic forecast calls for slow growth in economic output over the next

three years. The average annual growth of Ventura County GDP forecasted for 2018 through 2020 is

about 0.25%. This is statistically the same as zero growth. While this is not necessarily recessionary, it is

dismally slow. It is dramatically lower than the state average of 2.9%. It is close to the approximate one-

fifth of a percent average annual population growth forecast for the same period.

Ventura County 10-Year Employment by Occupation Forecast

2007 2017 2018 2028 2007-17 2018-28 2007-17 2018-28

. percent percent

no. of jobs no. of jobs no. of jobs no. of jobs change change change change

Total: All occupations 306,220 305,850 309,338 318,436 -370 9,098 -0.1 2.9

Management 16,850 16,370 16,414 14,597 -480 -1,817 -2.8 -11.1

Business and Financial Operations 15,190 17,210 17,385 19,133 2,020 1,748 13.3 10.1Computer and Mathematical 7,910 7,260 7,447 7,634 -650 187 -8.2 2.5

Architecture and Engineering 7,910 7,460 7,554 7,888 -450 334 -5.7 4.4

Life, Physical, and Social Science 5,240 4,240 4,316 3,566 -1,000 -750 -19.1 -17.4

Community and Social Services 2,900 5,030 4,588 4,988 2,130 400 73.4 8.7

Legal 1,870 1,900 1,925 2,019 30 94 1.6 4.9

Education, Training, and Library 18,710 20,940 21,152 23,200 2,230 2,047 11.9 9.7

Arts, Design, Entertainment, Sports, and Media 3,270 3,940 3,841 3,738 670 -103 20.5 -2.7

Healthcare Practitioners and Technical 12,610 14,920 15,258 18,478 2,310 3,220 18.3 21.1

Healthcare Support 7,020 6,740 6,975 8,711 -280 1,736 -4.0 24.9

Protective Service 5,270 5,010 4,998 4,928 -260 -70 -4.9 -1.4

Food Preparation and Serving-Related 25,790 31,230 31,708 34,617 5,440 2,909 21.1 9.2

Building and Grounds Cleaning and Maintenance 9,270 8,900 8,902 9,498 -370 596 -4.0 6.7

Personal Care and Service 6,840 10,110 10,367 11,980 3,270 1,613 47.8 15.6

Sales and Related 33,780 35,710 36,860 38,245 1,930 1,386 5.7 3.8

Office and Administrative Support 52,720 44,460 45,065 43,378 -8,260 -1,687 -15.7 -3.7

Farming, Fishing, and Forestry 6,990 5,900 5,757 4,329 -1,090 -1,429 -15.6 -24.8

Construction and Extraction 16,690 12,270 12,013 9,864 -4,420 -2,148 -26.5 -17.9Installation, Maintenance, and Repair 10,110 9,550 9,598 10,461 -560 863 -5.5 9.0

Production 22,750 20,200 20,339 19,028 -2,550 -1,311 -11.2 -6.4

Transportation and Material Moving 16,540 16,500 16,876 18,155 -40 1,279 -0.2 7.6

Date: October 29, 2018

Source: CA-EDD (OES data program) and CERF

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Sources: U.S. Bureau of Economic Analysis and CERF

Sources: U.S. Bureaus of Census and Economic Analysis and CERF

If the current forecast holds, Ventura County will have experienced seven years of essentially zero

economic growth. This is truly stunning considering the economic outlook just a few years ago. As

recently as two years ago, CERF developed a reputation in Ventura County for providing pessimistic

forecasts compared to conventional wisdom. Our forecasts of low growth, in the neighborhood of 2% at

that time, were labeled “grim” by local news agencies and those forecasts were sometimes treated

dismissively by a number of local policymakers. Even our most pessimistic forecast scenario, however,

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proved to be wildly optimistic. Against this backdrop, we once again call for a countywide wakeup call

among residents, business leaders, elected officials, and policymakers. The poor economic performance

of Ventura County is neither accidental nor inevitable. Fundamental change is needed before the County

can return to robust economic growth, but fundamental change is possible. We don’t need to look any

farther than the City of Thousand Oaks for signs of relief. Our hope is that the important work done in

Thousand Oaks to address the region’s housing shortage will be a model for other cities to follow and

that this work will be multiplied across Ventura County in the years ahead.

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SOUTHERN CALIFORNIA ASSOCIATION OF GOVERNMENTS900 Wilshire Blvd., Ste. 1700, Los Angeles, CA 90017Phone: (213) 236-1800www.scag.ca.gov

IMPERIAL COUNTY1503 North Imperial Avenue, Suite 104El Centro, CA 92243Phone: (760) 353-7800

ORANGE COUNTYOCTA Building600 South Main Street, Suite 1233Orange, CA 92863Phone: (714) 542-3687

RIVERSIDE COUNTY3403 10th Street, Suite 805Riverside, CA 92501Phone: (951) 784-1513

SAN BERNARDINO COUNTYSanta Fe Depot1170 West 3rd Street, Suite 140San Bernardino, CA 92418Phone: (909) 806-3556

VENTURA COUNTY950 County Square Drive, Suite 101Ventura, CA 93003Phone: (805) 642-2800

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