Employers in Mendocino County say housing shortage limits growth
Ross Liberty in the past year and a half has hired 23 workers for his 140,000-square-foot Ukiah factory known for crafting motorsports vehicle exhaust systems, but he’s concerned that the supply of housing locally will make it difficult to compete for top talent and for best pricing on his products.
The maker of original equipment for Indian and Slingshot motorcycles and Polaris personal watercraft and kits for other vehicles has been relying on increasingly more automation such as welding robots to augment its current staff of 73.
“It’s hard to find them and hard to retain them,” said Liberty, owner of Factory Pipe LLC. He often has to train local hires on the advanced machinery. While most all his factory floor staff already live in Mendocino County, highly skilled personnel such as engineers and senior management usually come from outside the county and even California.
And that’s when those recruits get sticker shock.
“I hired a plant manager from Tennessee, and he got 40% more money than he did in a plant he was running with 800 people,” Liberty said. “If I bring people in from out of state, I probably have to pay them 30% to 40% more, but I can’t charge that much more for products when I’m selling them to customers in Illinois, because I’m competing with suppliers from Asia and the East Coast where labor and housing costs are lower.
While Mendocino County housing is slightly more affordable for first-time buyers than dwellings in the state overall and certainly in the San Francisco Bay Area, local housing still requires a greater proportion of residents’ income than the national average, according to Dick Selzer, owner and broker of Selzer Realty & Associates, a residential and commercial real estate firm with multiple offices in the county.
The affordability index for first-time homebuyers in California at the end of last year was 43%, meaning that percentage of residents could pay for a median-priced home without spending over 30% of their income on housing, according to the California Association of Realtors. The index for Mendocino County was 44% for a $446,250 median-priced single-family home, compared with 47% in Sonoma County ($612,000) and 39% for the Bay Area as a whole ($924,330). For the nation, 69% could afford the median price of $268,520.
But Selzer points out that the median price for Mendocino County homes has gone up 10%-15% from this time a year ago, and the inventory of homes for sale (how homes are available at the end of the previous month after sales and new listings) was down to 1.6 months.
“The number of homes available in Ukiah Valley is nil,” Selzer said. “It’s very common to have multiple offers on one property and for the sale price to go over the list price.”
That makes the few people who are looking to flee higher-density parts of the Bay Area have few options in the already tight market, he said.
His firm also manages about 650 rental units in the county, and as of late March there were no units available that already weren’t in transition to the next tenants.
“There are lots of reasons for the answer but almost all of them at feet of government,” Selzer said. He’s heard from developers of large single-family-home communities in the unincorporated area north and northeast of Ukiah that additional requirements from the county as the projects moved forward have made the area less attractive for future projects.
The only two major subdivisions in the unincorporated areas of Ukiah Valley are mostly market-rate housing projects being developed by Chico-based Guillon Inc., according to county planning staff. The Business Journal didn’t receive a response from the county by press time about Selzer’s assertions.
The founder of Guillon, Doug Guillon, once owned a restaurant in Mendocino County and its troubles are attributed to a tight housing market for workers.
The Chico-based company also has built two of the largest housing projects inside Ukiah city limits in the past three years, 35-unit Main Street Place and eight-home Gobbi Commons, with six Gobbi units already sold as the project reaches completion early this year. All the Main Street Place units are occupied, said Selzer, whose firm manages the property.
Guillon now is working with the owner of a 121-lot property at 156 Lovers Lane in the incorporated areas just north of the city, a project called Vineyard Crossing, and on a 171-lot development called Bella Vista just outside the south end of the city.
The part of the Vineyard Crossing property on the east side of Highway 101 was proposed as a mixed-use project two decades ago, but that idea for Vineyard Crossing encountered opposition and has been pared back, with roughly 100 acres dedicated to a conservation preserve. The current iteration is on 23 acres the west side of the freeway and was proposed 4.5 years ago, with about three dozen units that would be set aside for moderate-income families, according to Jake Morley, head of Guillon predevelopment.
