Campus: CSU, Fullerton -- October 9, 2000


Cal State Fullerton Releases Housing Study: Will Housing Cost Affect Area's Economic Boom?

Despite its high median home price, Orange County remains an attractive location for the high-technology industry, according to a Cal State Fullerton housing study.

"Housing Affordability in the Southland: Will It Stifle the Regional High-Tech Boom?" was conducted by Dr. Radha Bhattacharya, associate professor of economics in the university's College of Business and Economics.

Bhattacharya studied the affordability of housing in the region, the reasons for the higher costs and the impact of rising prices on future economic development. According to her results, Orange County's median price of housing surpasses that of other high-tech clusters, such as Atlanta; Phoenix; Austin; Dallas; and the Research Triangle in North Carolina. Only the Bay Area, Silicon Valley and San Diego, are more expensive in terms of housing.

However, because of its higher ranking in air quality, higher index of culture, greater number of sunny days and other variables, Orange County still attracts skilled labor, noted the researcher. Such amenities will "continue to draw knowledge-intensive high-tech jobs. The high quality workers and the presence of agglomeration economics enable employers to benefit from the higher productivity.

"The process of high-tech clustering was initiated in Orange County as a consequence of its previous defense base and has now achieved a momentum of its own in the broader high-technology sector," said Bhattacharya. "In fact, the high home prices are a reflection of the strong agglomeration forces.

"Higher home prices alone will not stifle its regional economic boom in the foreseeable future," she noted. "High costs (specific to Orange County) alone are not likely to stifle the regional economic boom, as long as firms in Orange County remain competitive and stay at the cutting edge of technology. The underlying economic and institutional structure, as well as the microeconomic linkages across firms are critical factors that will influence the success of Orange County."

Copies of the report are available at http://business.fullerton.edu/rbhattacharya

Bhattacharya can be reached at (714) 278-3652 or rbhattacharya@fullerton.edu


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