Market Update: We break down the business implications, market impact, and expert insights related to Market Update: Marin County’s housing, child care shortages are choking economic growth, experts say – The Press Democrat – Full Analysis.
Housing, child care, workforce development and economic vitality are inseparable — and Marin County’s future depends on confronting structural constraints with data-driven policy and cross-sector collaboration. That was the message at a sizable conference on the local economy on Wednesday.
Karen Strolia, San Rafael Chamber of Commerce president and CEO, opened the 2026 Marin Economic Forecast by acknowledging national and local economic uncertainty. But she also urged the community to not let that delay the pursuit of solutions for the biggest local challenges.
“If we want a healthy economy, we need a healthy talent pipeline. If we want a healthy talent pipeline, we need real child care options, strong education to employment pathways and housing people can actually access,” Strolia told roughly 300 civic and business leaders gathered at the Embassy Suites hotel in San Rafael.
‘Economy we think we have’
Christopher Thornberg, founding partner of Los Angeles-based Beacon Economics, built his keynote around what he called a persistent mismatch between perception and data.
“It is a tale of two economies, the economy we think we have versus the economy we actually have,” he said
When narrative diverges from reality, he warned, policy goes awry.
“It’s the narratives that drive decisions, and of course, it’s the reality that determines the outcome of those particular decisions,” Thornberg said.
In California, he added, the wrong narrative is “driving bad policies.”
Strong household metrics — with caveats
Thornberg argued that many claims of broad-based economic distress are overstated.
“People are not struggling. People are not suffering. Consumption is at an all time high on a per person basis, up 20% in 10 years,” he said.
Yet he cautioned that current strength rests on unstable foundations.
“The problem in our world today is very simple. It isn’t that the underlying economy is strong. It absolutely is. It’s why is it so strong?” he said. “The answer there is that the economy, the financial circumstances of American households, are being boosted by two unsustainable situations.”
Those, he said, are “that massive financial market bubble” and “this massive amount of government borrowing at the federal level over $2 trillion in stimulus we throw at the economy this year.”
He translated the borrowing into household terms, estimating it amounts to roughly a $15,000 annual subsidy per household — not a permanent growth strategy.
Transfers, poverty and incentives
Thornberg highlighted the scale of federal transfers.
“Right now in the United States, there are $4.4 trillion of government transfers on an annual basis, one out of every $5 — 20% — of household disposable income in the United States right now comes directly from the federal government in the form of a transfer.”
He argued that incentives shape public narratives.
“My new expression is, ‘Give a man a fish, you feed it for a day. Teach a man to fish, you lose your nonprofit’s funding grants,” he said. “There is a poverty industrial complex out there, folks who make a living telling you, ‘Everything’s terrible.’”
California’s income paradox and housing constraint
Thornberg pointed out that California’s economic story has two contrasting narratives.
On one hand, income and productivity metrics are strong. “California median household incomes just crossed $100,000. That is 20% higher than the rest of the nation,” he said, noting that Marin County sits even higher with about $147,000 median household income — among the highest in the country. This reflects robust economic output on an intensive, per-worker basis.
But on the other hand, job and labor force growth lag national trends — a condition he attributed primarily to the state’s persistent housing constraints.
“The problem in California is very simple,” he said. “We won’t build housing, which means we don’t have labor force growth, which means the economy cannot grow beyond the limited amount of workers who still live here. It’s not complicated.” With restricted housing supply, workers are priced out or discouraged from relocating, suppressing overall growth. Thornberg’s blunt formulation underscored that Marin’s economic stagnation — flat GDP and slow employment growth in some cities — reflects a statewide pattern.
Marin’s housing reality
In Marin specifically, Thornberg said housing scarcity is acute.
“The real problem with housing is there is nothing to buy. There is no inventory,” he told the audience.
With median home prices approaching $1.6 million and rents routinely high, the limited inventory is accessible only to affluent buyers, perpetuating a bidding dynamic that locks out first- and middle-income households.
“That tiny group of people have one feature, common to all of them: they’re rich. That’s why they win the bidding war,” he said, describing how income concentration among buyers reinforces high prices and barriers to entry.
He tied this directly to labor force issues. Without affordable housing, the labor pool shrinks. Local data he cited showed employment declines in San Rafael and a smaller overall county labor force compared to pre-pandemic levels, reinforcing his broader point that lack of housing chokes economic momentum.
“The only way to prevent them from being outbid is to build more,” he said, urging rapid expansion of housing supply through zoning reform, streamlined permitting and reduced barriers to multifamily development.
Policy realities and structural responses
Thornberg also critiqued incremental reforms at the state level that fall short of what’s needed. For example, he argued that modest changes to the California Environmental Quality Act (CEQA) have too many limits to meaningfully speed development.
“The CEQA reform we got last year was barely reform. Yes, it simplified the CEQA process for a limited number of buildings, but that said, there were so many poison pills,” he said. “This evolution is way too slow.”
His comments reflect a broader theme in housing policy debates across California: that regulatory reform must be significant and sustained to unleash supply. Several recent state laws, namely Senate Bill 330, have aimed at increasing housing near transit and streamlining processes, but the pace and scope often draw debate among planners, advocates and local leaders.
Too much tourism?
Thornberg warned that California’s tourism sector may have overbuilt.
“The real problem we have in a lot of tourism in the state of California is not a lack of tourists, but too much tourism supply.”
He pointed to a 25% jump in hotel room inventory over the last decade even as visitor counts stayed flat.
And for restaurants, he pointed to data on the number of patrons visiting each California establishment to suggest a glut. In 2014, that density was 720 people per restaurant. Today, it’s below 600.
“There’s too many restaurants. There’s too many hotels,” he said.
He argued the oversupply has implications for local tax strategy and planning. Cities compete to attract taxable sales and build hospitality capacity. But without matching housing and workforce to support those businesses, the economic benefits can be muted, Thornberg said.
Rethinking narratives for local policy
Underlying Thornberg’s keynote was a consistent refrain: stories drive decisions, but reality determines outcomes.
By zeroing in on California’s structural housing shortfall and Marin’s constrained labor force, Thornberg offered a diagnostic that aligns with his broader critiques of superficial crisis storytelling. His message to the audience — policy rooted in empirical understanding rather than fear or assumption — served as both a warning and a call to action for local leaders tasked with navigating the county’s economic future.
‘Growth and preservation are not opposites’
Marin County Executive Derek Johnson framed his remarks around opportunity rather than crisis.
“We start this conversation … not driven out of crisis. It’s driven by opportunity and to develop a community that thrives,” he said.
Johnson outlined plans for a countywide economic vitality strategy.
“Marin needs a shared economic vitality strategy that connects work already happening across jurisdiction, jurisdictions and sectors,” he said.
Drawing on a study tour by two dozen local civic and business leaders to San Luis Obispo, he emphasized alignment.
“What impressed us most … was not a specific project, but it was about a culture, a culture of collaboration, of shared purpose, about public, private and nonprofit and education partnerships,” Johnson said.
In San Luis Obispo, “economic vitality is deeply tied to place.” Walkable downtowns and gathering spaces “are not extras. They are part of our economic infrastructure.”
Housing and workforce, he stressed, must align.
“We have to think intentionally about how we create pathways for people to live and work and rent, especially young families and essential workers,” Johnson said.
Immigrant labor are key to the local economy, Johnson said.
“We have over 10,000 undocumented individuals who work in Marin County. They are the backbone of doing a lot of the work that many people do not want to do.”
Addressing a decades-long debate in Marin about urban growth and environmental preservation, he said both can coexist.
“Marin’s future is not predetermined. It is something that we shape together through choices we make and the partnerships we build,” he said.
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The workforce panel at San Rafael Chamber of Commerce’s Economic Forecast at Embassy Suites hotel in San Rafael on Wednesday, Feb. 18, 2026. (Jeff Quackenbush / North Bay Business Journal)
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The workforce panel at San Rafael Chamber of Commerce’s Economic Forecast at Embassy Suites hotel in San Rafael on Wednesday, Feb. 18, 2026. (Jeff Quackenbush / North Bay Business Journal)
‘Child care is workforce infrastructure’
A panel on workforce development reframed hiring shortages as lifecycle challenges.
“That lifestyle starts long before the first resume. It starts with childcare and early learning,” said moderator Josh Townsend.
Aideen Gaidmore, CEO of the Marin Childcare Council, said, “child care is workforce infrastructure. It is not a private lifestyle.”
“We would never, ever as a community, say our roads are bad, so that it’s the commuters’ issue,” she said. “So why are we blaming people who need child care as the issue is essential for a functioning labor market?”
Nearly 2 million parents in the U.S. reported that child care problems directly interfered with their employment last year, she said.
Gaidmore argued that lack of child care can erode a company’s workforce.
“Workers don’t quit loudly. When it comes to child care, they leave quietly,” she said. “They say, ‘Can I go part time?’ ‘I don’t want to take that promotion.’”
Rick Wells of the Builders Association of Marin warned that the local construction workforce is aging out.
“For every four workers that are leaving the trades, there’s only one worker coming in,” Wells said.
And construction projects keep moving along if all the workers are able to show up when their children’s health or school day changes.
“Reliable child care creates a reliable workforce,” he said.
Jesse Madsen of the Marin County Office of Education said exposure to real worksites matters for students who are trying to decide what they want to do for jobs.
“To be in the workplace and to interact with you folks … is really going to open their mind,” Madsen said to the employers in the audience.
Even limited engagement helps, he said.
“If you can dedicate between 15 minutes and an hour of time … those opportunities will allow us to really scale those first steps” students take toward careers,” Madsen said.
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The housing trends and policy panel at San Rafael Chamber of Commerce’s Economic Forecast at Embassy Suites hotel in San Rafael on Wednesday, Feb. 18, 2026. (Jeff Quackenbush / North Bay Business Journal)
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The housing trends and policy panel at San Rafael Chamber of Commerce’s Economic Forecast at Embassy Suites hotel in San Rafael on Wednesday, Feb. 18, 2026. (Jeff Quackenbush / North Bay Business Journal)
‘Housing development is economic development’
The housing panel confronted political resistance and legal change.
“The bottom line is, nobody likes to see their immediate environment change,” said moderator Jenny Silva of Call Marin Home, noting that even the Golden Gate Bridge faced opposition when it was built nearly a century ago. “Marinites overwhelmingly want more housing, yet every project has opponents.”
She endorsed building countywide housing advocacy, aligning local plans with state mandates, and preparing communities for the “discomfort” of necessary change.
Alex Schafran, a consultant who specializes in the politics of housing and urban development, said, “Housing development is economic development.”
He urged treating housing production as local job creation — in construction, maintenance and real estate — and expanding project financing and homeownership tools. Those include land trusts, condominium conversions, shared-ownership models and regional financing capacity such as the repeatedly proposed Bay Area Housing Finance Agency, which would mobilize capital and support nonprofit builders.
Land-use attorney Riley Hurd with Ragghianti Freitas LLP in San Rafael focused on legal certainty and permitting reforms. He pointed to SB 330’s shift to objective standards for denying multifamily housing projects as a wake-up call for local governments, but to get more units built quickly they’ll need to provide developers with three things: “clear path, clear fees, clear timing.”
His recommended local officials update their housing nexus studies, better connect impact fees to real costs, streamline objective zoning and approvals, and concentrate multifamily housing in transit- and downtown-adjacent corridors.
Egon Terplan, an urban planner and regionalism fellow at California Forward, urged better planning for water, sewer and power infrastructure to accommodate more, electrified housing and where it would be built.
He highlighted downtown and highway-corridor opportunities, and recommended co-locating housing with transit and prioritizing high-quality urban design to improve neighborhood acceptance and downtown vitality.
Joe O’Hehir, former CEO of senior help group Vivalon and a current board member of nonprofit developer Eden Housing, underscored aging demographics and nonprofit delivery.
“The myth I’ve been asked to address is that our housing problem here in Marin is primarily for young families trying to get in.” He called for scaled nonprofit affordable development paired with supportive services, right-sizing options for older adults to free family homes, and a reexamination of land-use ratios to increase developable corridor capacity.
O’Hehir also urged reconsideration of Marin’s approach to land use.
“We have beautiful trails. We have beautiful places to go…. But it’s 87% (open space) and 13% (urban areas), and that 13% is the Highway 101 corridor,” he said.
‘Not separate conversations’
Chamber CEO Strolia emphasized a multifaceted approach to Marin’s challenges.
“(T)hese are not separate conversations — economy, workforce, housing, transportation, equity,” she said. “They are one system, and solving for one requires us to work on all of them in parallel.”
Jeff Quackenbush joined North Bay Business Journal in May 1999. He covers primarily wine, construction and real estate. Reach him at jeff@nbbj.news or 707-521-4256.