Nonresidential Construction

Sierra Nevada Investing in Buildings that Provide Local Services

Why is it important?

The type of nonresidential space our communities build indicates the type of economic activities in demand and the types of jobs either available or being encouraged. Building purpose provides a strong indication of wages and the types of jobs available. For example, retail space and tourism structures employ significantly more low-wage jobs, while manufacturing space, medical and office buildings indicate high-wage jobs. Careful consideration of the types of nonresidential structures built can help communities change its economic future.

Because local governments in California are limited in how they raise revenues, they increasingly rely on new sales taxes to pay for government services. In this fiscal climate, local governments thus have an incentive to approve more new retail space than is good for a community’s overall wealth – its social, natural and financial capital.

How are we doing?

The North Central Sierra was responsible for 76 percent of the more than $3 billion in nonresidential construction in the Sierra Nevada between 1993 and 2003, followed by the South Central Sierra (16 percent), the East Sierra (7 percent), and the North Sierra (1 percent). These are almost exactly the same percentages reported in the 1999-2000 Wealth Index. Compared with California, the Sierra Nevada invests a higher percent of its nonresidential construction into churches, schools, medical facilities, storage, agricultural buildings, and buildings that provide local services. This is especially true in the North, where these buildings represent 60 percent of nonresidential construction and in the South Central and East, where they represent about 50 percent.

On the other hand, the Sierra Nevada under invests in office space, everywhere except North Central. The North stands out with its higher than average investment in manufacturing facilities, but has only two percent invested in retail space. South Central lags behind other regions in building manufacturing spaces - only eight percent of all construction. In the East, 1 out of 4 nonresidential construction dollars went to building structures related to tourism – reflecting the its economic priority for the tourism and service sector.

Download data and charts for investment by type 1994 to 2003

Download data and charts for investment valuation 1993 to 2003