Downtown San Diego seen from the airport. Photo courtesy of San Diego County Regional Airport Authority

San Diego’s business climate suffers from high electric rates but benefits from low sales taxes and a youthful population, according to a wide-ranging economic study of the region.

The San Diego Regional Chamber of Commerce‘s annual “San Diego Illustrated” report was presented to business and government leaders Wednesday.

“The more we can educate business owners and policy makers on the economic landscape of our region, the better equipped we all are to make sound policy decisions,” said Jerry Sanders, president and CEO of the chamber.

“We’re not as friendly as some of our neighboring states like Nevada and Arizona,” he noted, but added that San Diego by many measures is the most business friendly metro area in California.

Among the highlights of the report:

* San Diego’s population is younger than San Francisco and San Jose.

* The military, professional and technical services, and real estate sectors are bigger for San Diego than other California cities.

* Most San Diego business are small, with 74 percent having fewer than 10 employees. Only 5 percent have 50 or more.

* Property tax collections in San Diego are rising again after declining during the Great Recesion.

One reason electric rates are high is that San Diego is using a higher percentage of renewables — 33 percent — than the state average, noted Pedro Villegas, community relations director for SDG&E. Another is the permanent closing of the San Onofre Nuclear Generating Station, which provided very inexpensive power.

Much of the discussion as the report was presented centered around the impact of changing demographics, especially the Gen X and Millennial generations, on business.

“Today’s minorities will be the majority, led by growth in the Hispanic segment,” noted Ernesto Arredondo Jr., senior vice president of Wells Fargo Bank.

“Demographics and technology are making big impacts on how we’re building our cities,” said Mary Lyndon, executive director of the Urban Land Institute of San Diego-Tijuana.

She said housing is getting smaller and there is a resulting greater demand for public amenities. The sharing economy, from Uber to Airbnb to shared office space, is changing the dynamics of real estate development, she noted.

Dan McAllister, San Diego County’s treasurer-tax collector, said home prices continue to rise, which is a good thing for current homeowners, but added, “If you’re an entry-level person, looking to get into the market, you’re afraid.”

The full report is available online at

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Chris Jennewein

Chris Jennewein is Editor & Publisher of Times of San Diego.