By Kenneth Harwood
Economist, Solvang Chamber of Commerce
We seem to live on an economic mountain. Median household incomes in 2017 were higher here than in the United States as a whole.
Los Olivos had a median household income 85 percent higher than median income in the United States. Santa Ynez was 60 percent higher, Buellton 34 percent higher, Solvang 27 percent higher, and Los Alamos 19 percent higher.
Worldwide economic geography puts about half of all economic activity within 62 miles (100 kilometers) of a seacoast in temperate zones. That’s where we are. Real estate is more expensive here because of higher economic activity and moderate climate.
Another contributor to higher cost of real estate is governmental regulation. High standards of regulation produce higher prices of real estate, as well as safer and more durable housing. Santa Barbara County is notable for its zoning regulations.
The median value of owner-occupied housing in Solvang, for example, was $689,700 in 2017, more than three times the comparable median value of $193,500 in the United States.
People who live here need higher incomes to meet the costs of coastal location and governmental regulation. We appear to live on an economic mountain.
For more information: Estimated median household incomes in 2017 are online at U. S. Census Bureau Quick Facts, as are median values of owner-occupied housing. See The Oxford Handbook of Economic Geography (2000), Chapter 9, for details of coastal economic geography. For details of zoning and affordability see Janet Furman Spreyer, “The effect of land-use restrictions on market values of single-family homes in Houston,” Journal of Real Estate Finance and Economics, June 1989.
