CHICO — Chicoans know since the Camp Fire they have faced more problems with traffic, housing and groceries, but the real threat is starting to become clear.

It’s one that threatens the business community, the economy and the future of Chico, according to speakers at Friday’s State of the City and Business Summit, sponsored by the Chico Chamber of Commerce and the city.

It hinges on housing, which was impacted even before Chico became the new home for thousands displaced by the Camp Fire. Days on the market were few for home sales, and rental vacancy was in the 1-2 percent range.

Obviously, available vacant housing has been scooped up by wildfire survivors, grateful to find a place to stay near their work or previous home town.

But the threat starts developing over time as survivors can’t find comparable housing to what they had previously.

It’s not FEMA trailers or student housing or “make do” housing, several speakers said.

Even though they may hold down well-paying jobs, the place that employees go to at day’s end is key to their quality of life. They may be satisfied with temporary housing in the short term, but not in the long term. And they may leave Chico because of it.

The problem is that Chico doesn’t have the kind of housing — either single-family or apartments — that needs to be available in the long term.

Executives or professionals with Chico companies or businesses may not be willing to wait for that to happen. That in itself can threaten the foundation of those companies, and in cases where headquarters are somewhere else, could lead to that company leaving Chico as well.

Additionally, Chico’s situation could worsen if businesses can’t fill those staff vacancies, either by finding local personnel or drawing in new candidates from outside the area. What happens when those top-level executives can’t find appropriate housing?

“It’s all about replacement housing, not FEMA trailers. Hundreds, thousands of replacement housing are needed. We have to have an entirely different mind-set, and we need to rely on our local leaders,” said Golden Valley Bank CEO Mark Francis after sharing his bank’s fourth quarter “Economic Snapshot” of how Chico is doing.

“Employers are facing an inability to attract talent and loss of employees because of housing,” Chico Chamber Chair Michelle Niven told the audience. The chamber released information from an employer survey after the wildfire.

“Housing is urgently needed,” said Niven, who also turned to another common community complaint, that of road improvement and maintenance, as well as unfunded pension costs.

The chamber’s Special Report: Camp Fire is available on the chamber’s website

Chico Mayor Randall Stone agreed that housing must be a priority, not only for new and existing residents, but also for the homeless.

Regarding Camp Fire displacement, he told about talking with an official from another community struck by a natural disaster, saying that Chico doesn’t want to become a “community of fifth-wheels,” referring to trailers. Not having fire victims move from temporary into permanent housing means losing property tax and the sense of community.

Stone also said there is no city-based reason why developers aren’t building. There are about 5,300 units of single and multi family dwellings that have received city approval, and are “in the pipeline.”

Saying that Chico developers aren’t building, Stone said, “Chico builders are keeping the stock low.”

Stone announced he will pursue inclusionary zoning to boost Chico’s low-incoming housing units, requiring a percentage of residential projects to be low income.

Stone said he recognized that some of that permit activity may have been fueled by the city’s increase in permit costs, and that builders sought permits before cost rose, but didn’t plan to use them immediately.

Economic snapshot

Golden Valley Bank CEO Mark Francis pointed out additional impacts from the Camp Fire during his “Economic Snapshot” presentation.

Covering a variety of economic indicators, the fourth quarter report showed the start of Camp Fire impacts, with indicators like rising housing prices and “skyrocketing” transient occupancy tax from hotels and motels. Those could be viewed as vibrant indicators but Francis noted that’s not evidence of a growing economy but of an economy influenced by natural disaster.

Francis also noted the down sides of those indicators. The lodging tax is only collectible the first month, after that the “occupant” loses the transient quality. That means not only the city but local tourism programs that tap the tax lose out.

Housing prices, which have risen, reflected more of a bidding war, with insurance checks funding competitive offers and driving up prices.

Francis noted that the average 3-bedroom home sales price was nearly $386,000 in December, the highest since 2007.

When the owner tries to sell that house, it’s unlikely the investment will be recouped, unless it’s an immediate turn-around sale.

Francis also included closing price comparisons. In October, the closing cost for the average home in Chico was 1 percent below the list price. In January, the closing price was 4 percent above.

While sales tax dipped from the previous quarter, Francis said fire survivors did bolster purchasing, but alternately existing Chico residents “stopped shopping,” shocked by the fire.

If there was positive news with Chico’s economy, it’s that in the fourth quarter job growth was high. Also reflecting positivity was the bank’s Business Confidence Survey, which showed employers predicting increases in top-line sales, in profit, about the same level of employment, and better business conditions both locally and nationally this year.


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