American mobility slows as housing costs soar
San Diego, Calif.
''I haven't seen a house for under $100,000 that I would put my dog into.''
With these words, the wife of an engineer from Virginia touched a very tender topic here: the high-priced San Diego housing market.
Her comment, reported by a top executive of the local firm that recently tried to recruit her husband, helps explain an increasingly serious problem in southern California and throughout the United States: the inability to attract new talent because of exorbitant real estate costs and high interests rates.
So serious is the problem that President Reagan, addressing the National Association of Realtors in Washington March 29, offered a five-point program to aid the housing industry. He stopped short of the $5 billion infusion of mortgage-subsidy funds for middle-income families urged by many real estate brokers. But he did propose to increase the flow of labor union pension funds into the credit markets - making more mortgage money available - and to ease government regulations on home mortgages.
The Greater San Diego Chamber of Commerce, surveying the housing market last October, put the average house price at $127,000 - 60 percent above the national average. Yet the per capita income here is almost exactly at the national average. The typical household here, says Chamber economist Max A. Schetter, will have an income in 1982 of $30,100.
Those kinds of figures, coupled with high home mortgage interest rates that averaged 17.49 percent nationally in early February, probably mean that the engineer and his wife will remain in Virginia - along with dozens of other would-be-Californians.
In the current situation, say a number of businessmen recently interviewed in San Diego, any relief is welcome. But they see little prospect for any major change.
The problem is not unique to San Diego. One measure of work force mobility - the sale of new houses--suggests that the much-noted ability of American families to pull up stakes and shift jobs is slowing everywhere. Figures released March 29 by the Department of Commerce and the Housing and Urban Development Department showed a decline of sales of new single-family houses by 11.8 percent in February--to the second-lowest monthly rate since the government began keeping figures in 1963.
In the past, much of the economic success of the San Diego region has depended on that very mobility. Outsiders, noting the temperate climate, clean environment, and easygoing life style, flocked in during the 1970s.
Between 1970 and 1980, as many Northern cities were losing people, San Diego County grew by 37 percent. The county (large enough to hold Connecticut, Rhode Island, Delaware, and Washington, D.C.) grew by 50,000 people each year in that period--adding people at twice the speed of the rest of the state and nearly four times the national rate.
The result: a transformation of San Diego proper from a sleepy little border town to the nation's sixth largest city, at the heart of the 19th largest urban area in the United States. ''Everybody out here is from somewhere else,'' says Cushman Dow, a past president of the Chamber of Commerce.
But here, as elsewhere, the housing market has gone flat in the last 18 months. From 1980 to 1981, the number of building permits in the county fell 46 percent--even as home prices continued to rise. Builders retrenched or went out of business. In the city proper, only 1,500 residential permits were issued in 1981, compared with 2,300 the year before.
Jerry Ringer, spokesman for a local high technology firm, Cubic Corporation, says that his company is examining ways to subsidize housing through interest-free loans or by buying up a portion of the equity. The firm has also redesigned its corporate structure, built new labs, and found ways to place incoming engineers into positions of maximum responsibility--all to help its recruitment efforts.
But at present, he says, housing costs make it ''almost impossible to be able to transfer an engineer from any part of the US to San Diego.'' He says that the equivalent of a house selling for $80,000 on ''Elm Street, Newton, Mass.,'' will sell for $150,000 here.
Even the military, which is the county's second-largest employer (behind manufacturing), is worried. The Navy, which houses one-quarter of its fleet here , has been returning some ships to the recently reopened port of Long Beach - though a Navy spokesman said that has ''nothing to do with the housing situation.'' Plans are afoot for construction of as many as 1,700 new units of Navy housing, of which 292 have already been authorized by Congress if the Navy can prove that there is no suitable affordable housing in the area.