The annual Radius Real Estate & Economic Forecast on Thursday doled out both tricks and treats for the state of California’s and Santa Barbara County’s economies. The breakfast, now in its sixth year, featured speeches by Dan Walters, a well-known political journalist for The Sacramento Bee, and three Radius real estate brokers, who all spoke to a huge crowd of area business leaders at the Fess Parker DoubleTree Resort.
Walters spoke first, sharing his thoughts on this year’s work of the state legislature. He said that California, the ninth largest economy in the world, could potentially suffer from the “unintended consequences” of recent laws, particularly Proposition 30, a ballot measure approved by voters in 2012 that has increased taxes on the state’s highest earners — to help pay for education — over the next seven years. Walters railed against the measure, saying it would only be a temporary fix and has served to make the state “even more dependent on its tax revenue.” Walters went on to say that a major fault of the proposition is its reliance on millionaires’ earnings, which he said can fluctuate year to year. “It’s exactly the opposite of rational tax policy,” he said. The aforementioned “unintended consequences” of Prop 30, he said, could include top earners moving to other states.
Radius broker Steve Golis went on to talk about the county’s residential rental market, celebrating many of the cities’ low vacancy rates. Paul Gamberdella, another Radius broker, talked about the county’s commercial leasing market, noting increases in the leasing of office- and retail space and the decrease in the leasing of industrial space. Although he mentioned recent lease renewals in Goleta — including those by Raytheon, Allergan, and Lockheed Martin — he also said that the Good Land has 300,000 square feet of available office space, which could be best used by companies in the software, medical, biotechnology, and energy industries. Gamberdella also touched on the increase of retail activity in downtown Santa Barbara’s Funk Zone, championing the “bustling” scene but questioning whether, with that area’s high rents, the scene can sustain itself.
Mark Schniepp, the director of the Santa Barbara-based California Economic Forecast, rounded out the morning, making note of recent money-related matters — from the popularity of Breaking Bad characters as Halloween costumes to the recent strikes by McDonald’s employees for higher minimum wages — and offering predictions for the financial future. Schniepp, who has a Ph.D. in economics from UCSB, cautioned that unemployment rates will remain high for the next few years and that the construction and manufacturing industries will only be increasingly “outsourced and automated.” Where growth lies, he said, is in the fields of technology, health care, marketing, and data analysis.