High-income households nearly double in Sonoma County since 2010

Almost 18 percent of the county’s households earned $150,000 or more last year, up from 10 percent of households at the beginning of the decade.|

The number of upper-income households in Sonoma County has nearly doubled since 2010, even as the share of county residents living in poverty has dropped back to pre-recession levels, according to new data that reveals a powerful shift in the local economy.

Almost 18 percent of the county’s households earned $150,000 or more last year, up from 10 percent of households in 2010, one year after the end of the Great Recession, the U.S. Census Bureau reported this month in its? 2016 American Community Survey.

The increase - from 18,943 households at the beginning of the decade to 32,813 last year - appears to suggest that incomes are rising in the county’s wealthiest households, according to interviews with local business leaders and economic analysts. The county saw a combined increase of just 1,420 households at all income levels during the period, which indicates the shift was not solely caused by an influx of affluent newcomers.

However, it is not clear exactly what’s behind the trends, said Jonathan Coe, president and CEO of the Santa Rosa Metro Chamber of Commerce. The new data also shows an increase in middle-income households and a significant decline in the number of people living in poverty.

A “tightening” of the local labor market may be pushing up wages, Coe said. The county’s jobless rate, which soared to nearly 12 percent during the recession, had fallen to just 3.9 percent in August ­- the sixth-lowest in the state.

“Many companies are finding it harder to come up with the folks they need. That may be driving up wages,” Coe said, adding that census data suggests “incomes are rising all across the board, and for whatever reason it’s happening most significantly at the highest end.”

The new data also shows a decline in the number of households in poverty. According to census estimates, there were 40,313 households in the county with incomes of $35,000 or less last year, down from 53,856 at the beginning of the decade.

Last year, 9.2 percent of Sonoma County residents were living at or below the poverty level, which the federal government defined as $24,250 for a family of four. At the beginning of the decade, it was 13.1 percent.

What these statistics do not show is how many of these residents saw their incomes rise and how many left the county altogether.

At the county’s Human Services Department, social service caseloads for such things as food stamps, CalWORKS and general assistance have all seen moderate to significant declines. But that does not mean the economy has completely eliminated the need for public assistance, said Karen Fies, Human Services director.

Fies said there are many factors that may have led to the decline in social services caseloads. Some residents may have been reached their time limit for assistance, while others may have moved out of the county. Still others, Fies added, may simply not be participating in the programs.

Many of those who have found employment at lower income levels continue to need assistance, she said.

“What I can tell you is we continue to serve people and their need remains really high,” she said. “The Sonoma County economy is still really quite good. People who are able to work ... can get a job fairly easily, but it may not pay them enough to make them self- sufficient without public assistance.”

Fies said those on public assistance are finding it increasing difficult to live in Sonoma County.

“Everything is so expensive and there’s so much inflation. Gas, food, housing, everything is going up,” she said. “Like Silicon Valley or San Francisco, the poor or the working poor are priced out of housing.”

Those who can afford to live in Sonoma County are increasingly buying up homes priced at $1 million or more.

“The volume of sales in the million-plus sector is off the chart,” said Lisa Thomas, an agent who specializes in high-end sales at Pacific Union International. “But that’s not all to do with people who live in Sonoma County.”

Thomas said the county continues to be a retirement destination and in some cases people are “pulling money out of Bay Area and moving up here.”

“We’re in full employment and household incomes are increasing because of that,” she said. “The number of sales at the middle to upper price ranges are so much higher than they were.”

Rising incomes in the Bay Area and Sonoma County have transformed the local real estate market. Sales of homes priced at $500,000 and above have tripled in Sonoma County since 2010, while sales of homes below $500,000 have been cut in half, according to an analysis of 2016 sales trends by Thomas.

More than one in eight homes sold last year in Sonoma County was priced at $1 million and above, up from just 4 percent of sales in 2010, Thomas said. In 2010, before the recession hit, they accounted for ?12 percent of sales.

Ross Liscum, a broker associate with Century 21 North Bay Alliance in Santa Rosa, said baby boomers like him have been accumulating income over years and even continue to work. They’ve built up assets over 40 years and some are buying second and even third homes, he said.

“These numbers are not a surprise to me,” Liscum said. “The influx of people that have moved here in the last 10 years from Bay Area and elsewhere came with assets and maintained their income.”

Ben Stone, executive director of the Sonoma County Economic Development Board, welcomed the trend of more upper-income households, but he warned that prosperity is not being shared by all residents in Sonoma County.

“We have work to do to increase opportunity and prosperity” for disadvantaged communities, especially the county’s growing Latino population, said Stone, adding that investments in career technical education and training are becoming increasingly important for such prosperity.

“The more we can raise our productivity, the more they can be paid, the better they’ll live,” Stone said.

Without such investments, it will become more and more difficult to fill the jobs of the future, Sonoma County Supervisor Shirlee Zane said.

“We need engineers and planners, people with technological skills,” she said. “We’re making important investments but we’re not bucking the national trend. We’re still seeing income inequality and overall wealth disparity.”

That inequality is partly a product of economic policies and a lack of government initiative, she said. For example, local governments have “not done their part in building affordable housing,” she said.

“The more that we can expand the supply of housing the better off we will be in supporting moderate-income families that do want to stay in Sonoma County,” she said.

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