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ORANGE COUNTY PERSPECTIVE

Cities on Forced Sugar High

March 09, 2003

The median price of an Orange County home soared 19.8% to $369,000 in January, the highest in Southern California. Though homeowners welcomed the news reports, the increase added to growing frustration among those still chasing the American dream of homeownership.

The ray of sunshine for those shut out of the market is that many Orange County cities are, by California's gold-plated standards, relatively inexpensive places to do business. Costa Mesa finished at the top of a recently compiled list that details the least-expensive California cities in which to operate a business. Fullerton and Anaheim are close on Costa Mesa's heels. Brea, Buena Park, Cypress, Fountain Valley, Garden Grove, Irvine, Mission Viejo, Newport Beach, Tustin and Yorba Linda aren't far behind.

What that means, the survey's authors say, is that these cities are in better shape than high-cost alternatives, including Los Angeles, when it comes to the necessary business of attracting new employers.

The picture isn't perfect in Orange County. The list prepared by Los Angeles-based Kosmont Cos. and the Rose Institute of State and Local Government at Claremont McKenna College shows Huntington Beach, Santa Ana and Westminster as being burdened with relatively high costs of doing business.

The big question is whether cities blessed with relatively low costs will use their development and redevelopment powers to lure employers who can offer jobs with solid wages and benefits. It's an uphill fight right now because the formula that Sacramento uses to return taxes and fees to cities forces local government to scramble after retailers that spin off sales tax receipts needed to balance budgets. And the sad reality is that many retailing jobs don't pay solid wages or offer benefits.

Homeownership will always be an expensive proposition in Orange County. Some cities are making a dent by insisting on more low-income housing. But cities can do more to level the playing field if Sacramento wakes up and uses common sense when it comes to redistributing taxes and fees.

Once that happens, cities will be able to ignore the "sugar high" that sales tax receipts generate and concentrate on luring companies that offer better-paying jobs.

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