The middle class is being thinned out in the San Fernando Valley (Credit: iStock)
The San Fernando Valley economy is booming. But high housing costs is contributing to the exodus of an increasing number of working-age adults, shrinking the region’s middle class and putting pressure on companies in the area.
The lack of workplace housing is one of the biggest risks to the Valley’s economy, according to a report by the Center for Economic Research and Forecasting at Cal Lutheran University, which was reported by the Los Angeles Daily News.
The exodus of workers is part of a broader statewide trend as housing prices climb. Despite recent signs of a cool-off, housing data shows that the media cost of a single-family home in the 818 ZIP code rose 9 percent last year to $675,000.
“Many hundreds of thousands of employees in retail trade, leisure and hospitality and education and health services are finding it increasingly difficult to live in the Valley,” the CERF report said.
Matthew Fienup, CERF’s executive director, said there has been a “hollowing out” of the Valley’s middle class. He called that a “cautionary note” in the otherwise positive outlook for the region’s economy, which has been outpacing the rest of Southern California.
Gross Domestic Product in the Valley grew by 4.3 percent from 2014 to 2018, compared to 3 percent in Los Angeles, and zero growth in Ventura County.
CERF expects growth in the Valley to average 4 percent over the next two years, the Daily News reported, which will “significantly outpace” Greater L.A. [LA Daily News] — Alexei Barrionuevo