Taxes, regulations, housing and homelessness top concerns for LA County businesses
Taxes, fees, government regulations and compliance remain the top concerns for Los Angeles County businesses, but housing costs and homelessness have vaulted high into the mix.
That’s the upshot of the 2018 BizFed Pulse Poll, which tracks the most pressing issues among the Los Angeles County Business Federation‘s 178 member-based associations, which represent 390,000 businesses.
A perpetual burden
California’s broad array of taxes and fees — a burden among businesses for decades — have topped the list since 2011, while government regulations and compliance jumped from No. 3 to No. 2 this year, poll results show.
Concerns over rising home costs and land use jumped from 10th place on last year’s list to the third place in 2018. That was followed by worries over inadequate public infrastructure (including roads, rail lines, bridges and waterways) and education, which landed in fifth place.
Transportation concerns were eighth on the list and the region’s homelessness crisis rose from 17th place last year to No. 9 in the latest survey.
The cumulative effect
“When you look at the high cost of doing business here and the lack of housing and transportation gridlock … there has to be some give somewhere,” said Tracy Hernandez, BizFed’s founding CEO. “If we were in a place where taxes and fees were high but there was still a good supply of housing and good transportation, it wouldn’t be so bad. But we have the worst cost of housing, the worst poverty rates and we pay the highest taxes.”
BizFed announced an initiative earlier this year that seeks to lift 1 million L.A. County residents out of poverty over the next 10 years. The U.S. Census Bureau estimates 16.3 percent of the county’s nearly 10.2 million residents are living in poverty. A big part of BizFed’s effort hinges on connecting key players who can institute change in the housing industry and overcoming the NIMBY — Not in My Back Yard — mindset many residents have toward new home construction in their neighborhoods.
Greg McWilliams, chief policy officer for FivePoint, an Aliso Viejo-based developer of mixed-use housing communities that has an office in Valencia, said the housing crisis affects people and businesses across the board.
“What’s important to note is that taxes and fees halt development, resulting in less housing, business stagnation, higher rents and higher rates of poverty,” McWilliams said in a statement. “Everything is connected here and the business community is actively engaging in solutions that will grow our housing stock and resolve the crisis for L.A. residents.”
A pricey place to live
The Economic Policy Institute’s most recent Family Budget Calculator shows that a family of two adults and two children in L.A. County needs to earn $7,691 a month, or $92,295 a year, to meet all of its living expenses.
That outstrips L.A. County’s median family income, which is just $66,203 per year, according to the U.S. Census Bureau’s American Community Survey.
“We have to build more housing at an urgent pace and it has to be at affordable levels,” Hernandez said. “It’s the crux of whether our economy will be able to survive and thrive.”
The employment outlook among employers is largely the same as last year. Only one in 10 employers who were surveyed anticipate layoffs, while more than 40 percent predict growth.
Why businesses and jobs are leaving
Employers polled by BizFed listed high taxes and fees as the primary reason businesses and jobs leave California. Others cited the Golden State’s stringent regulatory environment, traffic congestion and inadequate transportation systems.
The BizFed poll ranked Santa Clarita as the most business-friendly city in L.A. County, followed by Long Beach and Torrance. At the other end of the spectrum, Los Angeles was rated the least friendly, followed by Santa Monica and Beverly Hills.
