Mary Owens: The way forward for Nevada County |

Mary Owens: The way forward for Nevada County

It doesn’t take astute observation skills to notice the Nevada County economy is not strong and is moving forward in a low gear. The Great Recession hit our small community very hard and we are not alone. Most rural foothills communities in California suffered similar plights. The first phase of the economic fall was housing, which started its plunge in 2006. The broad story after that is well known to most, but the more complex issues of why Nevada County was hit so hard are not broadly understood.

If leaders of our community are to properly address the steps needed to repair and improve our lot, having a deeper understanding of the cause will assist in them in crafting a slate of solutions. This article is not drafted to just the public leaders of our community, it is addressed to all. If the citizens are to assist in the solutions, then, they too, need a deeper understanding of the causes and potential solutions. This article is the start of a series regarding the “Way Forward for Nevada County.”


I begin this series with a 500 foot view of our community’s economic history. In earlier articles, I discussed how our community was blessed with economic stability during the “Great Depression” unlike most small towns. The local gold industry provided a generous number of stable jobs through this period. That suddenly changed with the permanent closure of the Empire Mine in June of 1945. The main economic driver of our community for nearly 100 years was gone. Fortunately for Nevada County, new economic drivers outside the county were starting to emerge. With the GI’s coming back home from WWII, household formation for the “Silent Generation” was finally in full gear, after being delayed significantly by war. The California population entered a period of explosive growth. And that growth demanded lumber. Robinson Timber took over as the county’s largest employer. Young people once again had jobs and that meant they stayed in the community instead of leaving in search of sustainable employment. The lumber industry was an important step in the stabilization of our small community.


Starting in the late 1960s and the early 1970s, Stage One Senior Migration started with the Silent Generation. They were selling their homes in urban communities, enjoying handsome profits and were looking for better quality of life and reasonable housing costs. They were moving from an area of “needed and necessary for employment” to “desirable and affordable”. The Silent Generation flocked to many small towns in the California foothills. Their migration caused the first significant economic broadening of our local community since the war ended. Their long term presence and desire for new homes created jobs for contractors, realtors, restaurants, retail merchants, lawyers, accountants, engineers, gardeners, house keepers, hospital workers, nurseries, car dealerships, grocery stores, teachers, firemen and more. The economy was becoming more broadly diversified because of the number of young people able to stay here. Increased sustainable employment was created by Senior Migration Stage One.

Most small town communities are able to stabilize long term once an incoming, economically stable population enters their local economy. Nevada County was no exception. So, what happened to reverse this here and other small towns? The Great Recession is the obvious answer. Housing prices plummeted, the Baby Boomers delayed retirement, and the normal flow of Senior Migration Stage One and Stage Two stopped dead in its tracks nationwide. The housing markets seized into a nearly frozen state for years.


The housing valuation decline is over in the San Francisco Bay Area; their prices are now significantly higher than they were before the great housing crash. So why are we still stuck in the mud in our community?

Three things hit us hard.

First, seniors wanting to downsize their house could not sell their homes. Stage One Seniors Migrates in Nevada County was entering Stage Two Migration just as the financial crisis hit. They were unable to purchase their Stage Two home, which was smaller and more functional, as they aged. Without larger homes selling, the demand for moderately sized homes dropped as well. Banks radically reduced their lending to builders. The Dodd Frank bill had a lot to do with the prolonged housing crisis (more on this issue later). Moderately priced housing starts radically dropped. This meant a lot of working people were starting to get hurt financially. Housing contractors, retailers that sold housing materials, furniture stores, landscapers, and real estate agents were the first group, and other employment bases were not far behind them. As the skill sets of each employment base left the county, the future of that industry became more challenged.

As time passed, local seniors slowly started selling their homes after the crisis. They still wanted a smaller house in their current community. Since so few were being built, they looked elsewhere to find the type of housing they needed. Places like Del Webb in Roseville blossomed. Functional housing was available in abundance. So the seniors started moving out of their communities, even though this was not their desire. And with them, so did more jobs. Now the next phase of lost jobs hit our towns. Small shop keepers and restaurants had fewer customers. Schools started losing enrollment as young people left the community in search of sustainable employment. Charities were hit hard. Seniors disproportionately give larger sums to charity. The local economy could no longer support new car dealers. Sales tax was hit broadly. Even the larger employers were being impacted.


In 2013, the last shoe dropped. The demand for more moderate housing continued to increase because two generations were now competing for the same type of house. The housing inventory of moderate price range houses in Nevada County virtually disappeared. Downsizing seniors wanted the very housing that the millennials wanted, who are now entering household formation. The result; the housing shortage has also caused rents on moderately sized houses to increase significantly. If you cannot buy, you must rent. Without first time household formation sales for things like furniture, appliances, carpets, drapes, dishes, garden tools and on and on…. the economic cycle breaks down. Combine that reduction with Stage Two Senior Migrants leaving in search of this specific housing, the entire economic community starts shrinking.

Nevada County’s various community leaders are working hard to solve these problems. They are solvable. But to do so, the thinking of the past has to change. Even though our small town is tucked away in the quaint and lovely foothills, the broader national and state economy still impacts us significantly. We have to learn to adapt to changing circumstances. Nevada County can thrive in the future without following the path of other communities with congestion and out of control development. But policies which will enable an “economic spark” to take hold need to be the first steps in “The Way Forward for Nevada County”.

Next month I will be exploring the some of the options available to Nevada County. Upcoming opportunities at both the local and national levels can be used to our advantage to get our economy growing again.

Mary Owens, CPA, MS, Principal, President of Investments, Branch Manager RJFS with Owens Estate and Wealth Strategies Group, and independent firm located at 426 Sutton Way Suite 110 Grass Valley, CA 95945 | (530) 272-7500. Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. The information provided has been obtained from sources considered to be reliable but cannot guarantee that it is accurate or complete.

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