UCSB Economic Forecast Project examines life before COVID-19, future expectations
Although some COVID-19 economics impacts have “eased off” in recent weeks, the area’s most vulnerable are still being affected.
These impacts were discussed during a recent webinar hosted by the UCSB Economic Forecast Project, in which its Executive Director, Dr. Peter Rupert, laid out the way things were BCE, before the COVID era.
Dr. Rupert found that revenues in the first quarter of 2020 indicated a slight decline, Santa Barbara, and California at large, were in the middle of a housing crisis, and most people who wanted to work had a job.
At this particular juncture, COVID-19 impacts have eased since Santa Barbara County moved from the purple tier into the red tier, Dr. Rupert explained.
However, he stressed that revenue, job, and housing losses due to COVID-19 have not been evenly distributed at all and continue to affect the area’s most vulnerable residents.
In fact, they have affected the area’s most vulnerable populations.
Dr. Rupert said the pandemic has brought about “trickle down effects” to the economy. One concrete example he gave is COVID-19’s severe impact on childcare centers. Citing a Wall Street Journal titled “Coronavirus Threatens to Push the Childcare Industry Over the Edge,” Dr. Ruptert said that 40% of American child care centers are closed.
To illustrate the trickle-down impacts of this on the economy, he remarked, “So what this means is that many of those who need to go to work maybe can’t go to work because there’s no place to put their children.”
Prior to the coronavirus, California was in the middle of a housing crisis and had a 3 million home deficit. According to Housing Authority of the City of Santa Barbara executive director and CEO Rob Fredericks, that deficit is still here.
Although the Housing Authority has managed to build affordable housing complexes such as The Gardens on Hope and Johnson Court since the onset of the COVID-19 pandemic, funds for organizations like the Housing Authority to create more affordable housing is evaporating.
“There’s a great need for these developments still and we’re trying to meet that need, but it’s more difficult with funding resources drying up here… There’s less discretionary resources from local governments now to give to housing authorities to make these developments happen” he said.
In addition to housing issues, business in Santa Barbara was slowing down at the beginning of the year, according to Women’s Economic Ventures CEO Kathy Odell.
She explained that certain kinds of businesses were doing noticeably better than others. For instance, local restaurants were doing well prior to the pandemic, retail businesses were struggling for six to eight months before COVID-19.
Come March, local restaurants and hospitality became the hardest hit businesses. Ms. Odell stated that to this day, the industry “hasn’t recovered much.”
While restaurant revenues have climbed a little bit and some have revenues just 10% off of what they were making this time last year, those tend to be businesses that have ample outside space they can utilize to make as much seating as they had before March.
As for other types of businesses, Ms. Odell said they are between 30% and 40% down in revenue because of decreased operating hours.
Workforce Development Board of Santa Barbara County executive director Ray MacDonald remarked that pre-COVID unemployment was “pretty good” at around 6% and lower.
“Most people who wanted to work were able to find jobs. It may not have been the job that they wanted, but they were able to find jobs,” he said.
Once March came around and lockdown measures went into effect, unemployment spiked to 13%.
As he broke down the number of COVID-19 cases by occupation, Mr. MacDonald pointed out that most cases are in the agricultural sector, because it was forced to continue operating throughout the early days of the pandemic. Otherwise, it would have faced an industry collapse and food supply chains would have been disrupted.
The second highest occupation of COVID-19 cases was retired people.
Local housing has been impacted in certain areas such as the rental market, Mr. Fredericks said has undergone a “slight softening” due to students not coming back while their college campuses remain closed.
Since March, the Housing Authority has housed 120 people in Housing Authority units. Of those, 67 were formerly homeless.
COVID-19 has not yet brought about an increase in delinquency rates for housing and commercial real estate, according to Dr. Rupert. He warned that this could only be because of eviction moratoriums that have been enacted during the pandemic.
“We have to be very careful to think about these statistics because we don’t know how many people are really going to be delinquent or end up being foreclosed because of the eviction mandate,” he said.
One aspect of housing that has proven to be immune from the economic impacts of the pandemic is real estate for middle- and upper-income buyers. However, housing for lower income individuals has been impacted. To address it, the Housing Authority has had to adjust rent for those it houses.
“We had to do interim rent adjustments because the people on our programs pay a percentage of their income for rent,” Mr. Fredericks said.
In order to help people who have lost work due to the coronavirus, Mr. MacDonald said the immediate solution and the Workforce Development Board’s current priority is to get them short-term “transitional jobs.”
“If we can help them find those sorts of jobs, and those would be subsidized jobs, probably, that would be helpful until the economy can really bounce back,” he said.