Today's Inland Empire looks little like the Riverside-San Bernardino area of just a few years ago. The industrial and product distribution companies that provided the area's first wave of economic growth in the 1970s and '80s continue to thrive, but they are yielding some of their dominance to an onslaught of white-collar corporate firms and service businesses. And residents of the region's sprawling subdivisions now have new neighbors living in higher-density options that include townhomes, condominiums, and especially apartments.
The Inland Empire, in fact, ranks among the nation's key hot spots for apartment construction. Since the first projects in the current burst of development started hitting the market in mid-2004, deliveries have totaled 7,300 units, growing the area's existing stock by 4.2 percent at a time when many metro areas saw rental inventories shrink due to the conversion of apartments into condominiums. And that's not all: Another 5,700 units were under construction going into the second half of 2006, pointing to inventory growth of another 3.6 percent by the end of 2007, and many additional projects are in the planning stages.
Go East, Young families
Perhaps more than any other metro area in the country, the Inland Empire exists because of its housing market, and until very recently that almost exclusively meant its single-family home market. Households priced out of neighboring Los Angeles, Orange County, and San Diego have poured into Riverside and San Bernardino Counties for decades. Thus, even though the Inland Empire's median home cost ballooned 78 percent to nearly $400,000 during the past three years, pricing remains a bargain compared to the typical home prices of about $550,000 to $700,000 in the rest of Southern California. Many households just can't or won't plop down more than a half-million dollars for a modest house on a sliver of land near the Pacific Coast.
The long-term boom in the Inland Empire's single-family sector and the newly emerged spurt in apartment construction have joined to produce a total population that now numbers approximately 3.9 million people. That figure is up a whopping 20 percent since 2000. While many of these households still commute into other parts of Southern California to work, that traditional pattern grows less and less true every day. You've created a job production machine when you put together a labor force eager to work closer to home, large tracts of comparatively affordable–often underdeveloped–land, and an extensive transportation network. Since the start of the decade, the Inland Empire has generated 280,500 jobs, more than were added in Los Angeles, Orange County, and San Diego combined. The metro's employment base expanded by 29 percent during this time frame, compared to 4 percent total growth for the rest of Southern California.
In a new wrinkle to the Inland Empire's economic evolution, most of the recent job additions haven't come in the industrial and warehousing sectors that were core to previous expansion. Instead, corporate and service industry positions are the new prototype, with this growth in higher-paying jobs largely spawned by the real estate boom itself, according to John Husing, economist and president of Economics and Politics, a Redlands, Calif.-based consulting firm. "Professionals and companies needing to serve this large populace now are seeking Inland Empire offices," Husing reports. "This means architects, civil engineers, bankers, lawyers, and financial consultants all are migrating to the region. And with that, the office market has begun to expand vigorously, after lying dormant for almost 15 years."