When workers can’t afford to live here, businesses turn their
noses on San Benito County
The affordable housing crisis in San Benito County and elsewhere
in California is certainly excluding an increasing number of
residents from sharing in the American Dream, but perhaps an even
more serious downside are the companies that are scared away
– along with good-paying jobs – because there are no homes that
workers can afford.
When workers can’t afford to live here, businesses turn their noses on San Benito County
The affordable housing crisis in San Benito County and elsewhere in California is certainly excluding an increasing number of residents from sharing in the American Dream, but perhaps an even more serious downside are the companies that are scared away – along with good-paying jobs – because there are no homes that workers can afford.
Recently San Benito County Economic Development Coordinator Al Martinez surveyed 75 local businesses about their needs. He was told a top need was a quality labor force, since large numbers of employees were moving because they couldn’t afford to stay in the county.
Martinez said that a contact at Millgard Windows told him that 50 percent of their workforce was currently commuting from Los Baños or elsewhere in the Central Valley to work in Hollister.
Environmental and land costs contribute to the high costs, as well as developers opting to build big, expensive homes because they generate greater profits than smaller, more affordable homes.
It has to remain cost-effective for a business to stay in California and when the cost of living continues to increase, businesses start looking outside of California and sometimes even outside of the U.S., said Larry Cope, executive director of the Gilroy Economic Development Corp.
Another issue affecting business is that if housing costs are higher here than somewhere else, then wages need to be higher in order to retain trained staff, Cope said.
“There are only a finite number of individuals trained for a said job and in order to keep them they need to pay well. That adds to the costs of operating a business. I’m sure every company would love to pay its employees as much as it can, but if it can make that product for less three counties over, that’s the reality of doing business,” Cope said.
In order for Hollister to remain competitive in attracting businesses, the first thing it needs to do is solve its housing moratorium, said Jeff Pyle economic development manager for the city of Hollister. Beyond that, the community needs to come to some type of consensus that growth is OK, Pyle said. It’s OK to grow businesses, it’s OK to hire new employees and it’s OK to have more kids in the local schools. If it decides it’s not OK, Pyle said he’d be at a loss, because economic development requires growth. More development equals more economic vitality, he said.
Since Hollister is not a high-wage community, one of the bases the community needs to focus on is how to get more high-wage jobs here. In turn those jobs provide opportunities for young people to buy a house here and contribute to the economy.
“What was happening typically was that the South Bay came to Hollister because it was more affordable than the South Bay, but now that competitive advantage has diminished,” Pyle said.
Higher-wage jobs will then trickle down to retailers and other merchants, further strengthening the local economy, Pyle said.
One of the things that Pyle said can really help attract more businesses to this area is for current businesses to be ambassadors for their industries. People need to sell the quality of life benefits of being here to other businesses, Pyle said.
“If we can provide some leaseable space and give approvals and reasonable turn-around, that’s half the battle,” Pyle said. “People like Al Martinez understand, but people in the community need to get behind the idea that is OK to grow.”
It all starts with the middle-class, if the community doesn’t support the middle-class the bulk suffers, Pyle said. If people can’t afford to live in the community, they’ll live elsewhere and spend elsewhere. It starts with good schools and quality jobs, otherwise people will find a place that offers those things.
“We can’t put up new buildings and we can’t open new restaurants, so we need to get beyond this and get more competitive with other communities. Every community needs to ask the question ‘Are we competitive?’ If the answer is yes, keep it up; if not, you need to flip it so you are,” Pyle said.
The biggest challenge in California hands-down is affordability; people want to own houses, but it’s a niche market for affordability, Pyle said. If Hollister can’t be a competitive community, people won’t bother to look here.
“Any community that can make a dent in the affordable housing market will have a jump on the competition. It’s tough to solve on your own, but part of the solution is building quality housing and building denser so that people have choices. Usually that means building in areas that have previously not been developed. It all costs more, so the same developers who were doing projects 10 years ago need to find the right locations in the right markets, but it all starts with a public push,” Pyle said.
Californians are innovators, Pyle said. People here need to get behind the markets that currently exist here.
California, including San Benito County, is a global agricultural leader. This area needs to stay on top of that market. People need to create value and new products with that focus. By doing this they are essentially keeping that growth alive and expanding the economic base.
So Hollister now sits at a crossroads, growth and economic vitality is still obtainable but it will require local innovators and entrepreneurs who are willing to take a risk on this community.
