Michael Strech , president and CEO of the North State Building Industry Association , says homebuyers want to “ live , work and play in a home that is new , clean and safe ,” such as this development by DR Horton in Natomas . PHOTO BY FRED GREAVES
safe ,” he says . “ People can work 85 miles from where their home office is , and they may come in once a month and once a quarter , or they may never come in .”
Both trends can boost the local economy beyond increased home values and the property taxes the new residents might pay . An estimated 50,000 people work in the homebuilding industry , Strech says . While that figure includes agents and lawyers , many are contractors and construction jobs that can drive up employment .
“ These are well-paying jobs ,” says Strech , whose organization covers the Sacramento region . “ They ’ re not minimum wage jobs , and they ’ re not jobs you can export to another country . They ’ re jobs right here in Roseville and West Sacramento , and they ’ re growing the economy .”
In addition to supporting those jobs , transplants are likely to send more cash into the local economies . New homeowners , Strech notes , often make dozens of trips to hardware stores in the first year . Spending could rise in other sectors too .
“ You could see a little more sales tax and not just from more people ,” says Jeffrey Michael , executive director of the Center for Business and Policy Research in the Eberhardt School of Business at the University of the Pacific . “ If they ’ re spending more time close to home and less time in the Bay Area because they don ’ t have to commute as much , that leads to more discretionary spending ( here ).”
Broome says local business and political leaders should be thinking even bigger . While official labor data runs a year or more behind , GSEC is looking at consumer metrics using geofencing ( collecting data from mobile devices ) to better understand where the new transplants work . So far , it estimates that more than 200 Facebook employees moved to the region in 2020 . That bodes well for the region ’ s post-pandemic recovery in terms of job stability and income levels . “ The fact that we have Bay Area people moving up here basically means we will be able to flip a switch and turn the economy back on ,” he says .
The demographics fueling the trend will have long tails when it comes to economic impact , Broome says . A 32-yearold with a degree , for example , could work another 30-40 years , and that ’ s the kind of worker profile that will attract more high-tech ( and high-paying ) employers to the region .
“ If we can show data that we ’ re capturing our college students , and we can show data that young , bright professionals are coming to our community , now the entire workforce development of our community starts to change ,” he says .
There are signs that it ’ s already making a difference . GSEC was talking to more than 150 high-interest companies about relocating or setting up a presence in the region as of fall of 2020 , Broome says , up from 68 at the same time in 2019 . Overall , inquiries were up sixfold over the summer .
Last year , digital license plate company Reviver announced plans to move its headquarters from Foster City to Granite Bay . Neville Boston , founder and chief strategy officer , says cost was a big factor — office prices alone saved hundreds of thousands of dollars . But with 20 percent of the company ’ s workforce already living in the Sacramento area and commuting into Foster City several days a week , the move also made sense for employee retention and recruiting .
“ It made sense for us to relocate , because it wasn ’ t going to materially affect our business in a negative way being up here ,” he says . “ A lot of the talent we needed , we could find in the Sacramento area .”
Workforce and space challenges remain
The changes aren ’ t without challenges . The Capital Region already faces a shortage of housing , including affordable options . One regional assessment estimates that the region must add more than 150,000 dwellings , including 60,000- plus low-income units , in the next two decades to keep up with need . Advocates say that ’ s the tip of the iceberg .
Builders , real estate agents and advocates worry the demand from highincome transplants will push costs even higher , including in Midtown Sacramento neighborhoods that historically have been home to both young professionals and lower-wage workers in service and hospitality industries .
“ We just do not have enough affordable housing and then on top of the fact that more people are looking to purchase in the region is really creating
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