Bay Area year over year job growth slowed in October though the region continued to add jobs at a faster pace than the state and nation. Unemployment levels and rates remain low but did not decline further in October. The surge in labor force growth continued coming mostly from higher participation of existing residents. But very low unemployment rates and record levels of labor force participation rates raise questions as to where the workers will be found to fill the planned future job growth.
The Bay Area Again Outpaces the Nation in Job Growth
Though year over year job growth fell to 2.2% from 2.4% the month earlier, the region outpaced the 1.7% growth for the nation and 1.8 for California.
The San Jose and Santa Rosa metro areas led the region in job growth over the past 12 months.
Unemployment rates remained low in October 2018 compared to a year throughout the region with a 2.6% regional rate the same as in September. Labor force growth surged to nearly 80,000 for the past 12 months driven by record levels of participation by all age groups over 25.
Year over year job growth dipped in October to 85,000. Slowing labor force growth from boomer retirements will probably push job growth levels lower over the coming years.
Housing permit levels continued an upward trend in 2018 though most of the gains came in the first six months of the year. Permit levels are up 14% in the first nine months of 2018 led by strong gains in Contra Costa, Napa and Sonoma counties. And project approvals are also rising throughout much of the region
Recent job growth has been supported by declining unemployment and an increase in labor force participation—two factors that do not increase housing demand. But the region has reached the point where future labor force growth will need to come mainly from new residents and new housing
The next needed steps involve lowering the cost of building new housing, changing zoning to allow more and less expensive housing to be built and, hopefully, state funding to offset some costs of housing.
Perhaps the hardest challenge to overcome is the lack of affordable housing for middle income residents who are not eligible for subsidized housing even if it were available in sufficient quantity.
The bottom line, which should be understandable to Bay Area Council members, is that it is really hard if not impossible under current rules to build housing that is affordable to middle income residents yet pencils out for developers.
For readers who want to follow the recommendations of the Committee to House the Bay Area (CASA), look at the recent meeting packets for July and September at https://mtc.ca.gov/our-work/plans-projects/casa-committee-house-bay-area/casa-meeting-schedule.