In the 25 years since the Orange County Business Council began taking an annual pulse of the state of OC's demographics and economy, there's been the persistent theme of a strong local economy, but a worsening housing situation.
"We are now the economic engine of the region," said Wallace Walrod, chief economic adviser for the OCBC. "But the thing that was the biggest issue for us in 1999 is still the biggest issue now, which is our housing situation. It's just gotten worse over time."
Orange County is expected to become more diverse in the coming decades, according to the report, but will have an aging population and an educated workforce that will look elsewhere to live if the housing crisis continues to become more acute, Walrod and other experts said in unveiling the OCBC's Community Indicators report Friday, Nov. 22, at an annual OC Forum event.
The Community Indicators report, also published online Friday, details county trends over the last year, but this year also takes a special look at where Orange County was 25 years ago when the report launched and where it could be 25 years in the future.
Over the past year, OC has seen a small rebound in population with about 10,000 more residents. That's a reversal of the trend from 2020 to 2022 when the county saw about 40,000 people leave.
In 1999, when Y2K was believed to be the biggest threat by potentially disrupting computers across the country at the stroke of the new century, the median home price in OC was $275,000. Now it's at $1.45 million, 60% higher than the statewide median home price, according to the report.
Rentals, too, have become more expensive over the last year. A single worker needs to make $45.08 an hour to afford a one-bedroom apartment, 11% more than reported last year.
Jon Gould, UC Irvine School of Social Ecology dean, said the county is one of the best in the state at educating its population, but there's a lurking issue of brain drain - workers leaving to surrounding counties or other areas where it's cheaper to live.
The lack of housing will limit employment growth in the county, which could harm sectors such as health care where more workers will be needed as the county sees a large growth in its elderly population.
Right now, 17% of the county's population is 65 or older. That will nearly double to 31% by 2060, while all other age groups will see a decline in the share of the population, according to the community indicators report.
A recent poll conducted by the social ecology school found that half of OC renters worry about being evicted and 20% of homeowners are worried about foreclosure, Gould said. Two-thirds of people surveyed leaving the county go to nearby areas such as eastern Los Angeles County, the Inland Empire or eastern San Diego County, Gould said.
"We are losing people to our neighbors," Gould said. "We've spent a lot of money educating them and we are pushing them away."
One reality the county will need to stomach is that new homes will have to be smaller and more densely built than the current supply, Gould said.
And cities that don't look to address the issue will miss out on future economic growth, said Jeff Ball, CEO and president of the Orange County Business Council.
The OCBC advocates for the county's business community. Ball said there needs to a be discussion of bipartisan reform of the California Environmental Quality Act, which is often used to block housing and infrastructure projects.
Ball called on the business community to support local councilmembers who often face community pushback when housing developments need their approval.
Veronica Carpenter, chief administrative officer of CalOptima Health, which administers the county's public health insurance programs, said another policy push from the state that would help housing issues is getting a federal waiver from the Centers for Medicare & Medicaid Services to allow Medi-Cal health plans to provide rental assistance for people at high risk of losing their housing.
Carpenter said there's worry that it may not be granted by the new federal administration since it's a policy that Gov. Gavin Newsom, a Democrat, feels strongly about. Newsom sent the request in October 2023. The waiver request is still pending.
"We could help a lot of individuals," Carpenter said.
Elizabeth Andrade, executive director of 211OC, said Medi-Cal has done a good job of adding social services to its benefits and it's critical that people who become unhoused get back into housing faster since it will improve their outcomes.