LOCAL ECONOMY LOOKS GOOD, BUT CLOUDS ON HORIZON.

Byline: ERIC LEACH

Staff Writer

OXNARD -- This year should be a good one for Ventura County's economy, with rising employment and incomes, but there are several potential problem areas, according to economists who presented their economic forecast for the area last week.

"We are seeing very low population growth and very strong economic growth in Ventura County," said Bill Watkins, executive director of the UCSB Economic Forecast Project and a former research economist at the Federal Reserve.

Watkins presented the project's report on the Ventura County Economic Outlook 2007 at a seminar in Oxnard attended by 400 business and government leaders.

Linda Parks, chairwoman of the Ventura County Board of Supervisors, attended and said she was glad to hear the county's economy was prospering along with a low population growth rate -- less than 1 percent in 2006 -- that she advocates along with preserving open space.

Parks said it was clear to her that Ventura County's Save Open-space and Agricultural Resources initiatives approved by voters in the late 1990s to limit growth are responsible for the county's population growth rate declines.

"Without SOAR, we would have seen thousands of new homes in the open spaces around our cities," she said. "SOAR is helping maintain our quality of life and a strong economy."

Watkins did not discuss what effect SOAR might be having on the population but did point to an aging population and an exodus of younger people seeking jobs and cheaper housing elsewhere. The high cost of local housing will continue to drive away high-paying jobs, he said.

As an example, his report pointed to Technicolor's recent announcement the company is moving hundreds of manufacturing jobs out of the county.

The report also noted that Countrywide Financial's growth over the past real estate boom has greatly contributed to economic growth, so any decision it might make to relocate jobs or merge with another company could have serious economic consequences locally.

Amgen and other technology companies should help the county continue to prosper, the report said, and Watkins predicted the county's economic growth rate would be 3.9 percent in 2007 and 4.1 percent in 2008.

He predicted the county's job growth rate would be 1.8 percent in 2007. And he noted there are large numbers of county residents who commute to jobs in Los Angeles and might be able to fill new jobs created locally.

"So far at least, the county is pulling off the economic hat trick of strong economic growth in the presence of weak population growth," he said.

As for housing, "Realtors are having a terrible year," he said.

But he added the county is facing nothing like the drop of home values in the 1990s and predicted housing prices would rise in 2008. The median price for a Ventura County home was $565,000 last month.

He said the county's high cost of housing is a threat to the local work force, with growing numbers of residents priced out of home ownership. He showed a picture of a tin-roof shack and quipped that if it were in Montecito, in Santa Barbara County, it would sell for $2 million.

The pressure on the rental market has pushed rents to record heights -- up 6.1 percent in 2006 to a new peak of $1,523 in the county for a two-bedroom apartment.

In the Thousand Oaks area, rents were up 8.5 percent last year to an average of $1,637 a month for a two-bedroom.

As for housing construction, he predicted that after a low of 1,900 permits for 2007, new housing production would climb, exceeding 2,500 new housing units in 2009 and 2,800 in 2010.

Preliminary figures indicate Ventura County's population grew more slowly last year than even Santa Barbara County.

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