Imperial County is experiencing an unprecedented housing boom, with at least 1,000 new units a year going up. Depending on who is counting, somewhere between 12,000 and 20,000 additional units are in the pipeline - in a farming county with a population of only 155,000.

Two factors - one obvious and one less so - appear to be driving the boom, which started in 2002. The most evident factor is the price of housing elsewhere in California, especially in the San Diego area. New single-family houses in San Diego County generally start at more than $500,000. In Imperial County, new houses start in the low $200,000s. The not-so-obvious factor is the North American Free Trade Agreement. The pact has resulted in the construction of numerous factories, called maquiladoras, just across the border in Mexicali. The factory managers, whether American, Mexican or Asian, appear to favor living on the American side of the fence.

Whether residential development will continue at a rapid pace is a question on many people's minds. Imperial County has long had the state's highest unemployment rate. This year, the rate has been about 25%, or more than four times higher than California's rate, according to the state Employment Development Department (EDD). And the jobs that exist are often low-paying. The 2000 Census pegged the county's median per capita income at $13,239, which was only 58% of the state's median. The EDD expects most near-term job growth to be in all three levels of government (jobs which pay pretty well), and in lower-paying service and retail sectors.

Still, the recent transformation of grain and grass fields into housing tracts has been remarkable. Calling Imperial County “the next Temecula,” several of the nation's largest homebuilders are now building subdivisions. One of the first to arrive was the National City-based Corky McMillin Companies, which acquired The Allen Group's residential projects in Imperial County in 2001. McMillin currently is developing two projects in the border city of Calexico, one in the county seat of El Centro, and two in the City of Brawley, said McMillin Vice President Rick Jarrett. The company is building and selling 300 to 325 houses annually, with a good many of the units going to first-time buyers, he said.

Sales of all houses were easy for a period, although sales have slowed a bit during the second half of 2004, said Doug Russel, president of the Imperial County Board of Realtors.

“Four or five years ago, there were three for-sale signs in every yard. You couldn't sell a house,” Russel said. The market switched almost overnight to one in which multiple offers were common, prices rose $10,000 a month, few houses stayed on the market more than a week, and the price of speculative land jumped from $20,000 an acre to $50,000 an acre, Russel said. Now, things have settled down, but the market remains strong, with most houses selling from the high $200,000s to the mid-$300,000s, he said.

Who is buying these houses?

People in the industry say some people are relocating to Imperial County, and probably 5% to 10% of new houses are purchased by people who commute two hours to San Diego.

“We get phone calls all day from people in San Diego,” Russel added. “They've got a lot of equity and they are looking for investment property.”

McMillin's Jarrett said that, with the exception of Calexico subdivisions, most buyers are government employees and business people from the area. “In Calexico,” he said. “we get a fair amount of businessmen from Mexicali - people who want to live and have their children educated in the U.S.”

Imperial Valley Development Company's Paul Magaña, a native who recently hung out his own shingle, said Mexicali's industrial growth is an important element in Imperial County's future. Not only are Mexicali workers buying houses in the U.S., but more and more of the Imperial County economy is tied to Mexico.

Development is under way at the 1,700-acre Gateway to the America's industrial park, about seven miles east of Calexico. The project is at the designated border crossing for trucks, and a new highway is planned from the border crossing to Interstate 8. All of this is expected to induce growth in the logistics industry.

The retail market also is connected to Mexicali. A 900,000-square-foot shopping mall is scheduled to open in southeastern El Centro in March 2005. Big boxes of many varieties have been built in Calexico, El Centro and Imperial in recent years. Wal-Mart is planning to replace its Calexico store with a supercenter less than two miles from the border.

“Mexicali plays a big role in our economy,” agreed Russel, from the Board of Realtors. “They are building this infrastructure, these roads, all so that people can get here from Mexicali.”

Indeed, on a recent weekday morning, the parking lots at the Calexico Wal-Mart and a new Food-4-Less store located even closer to the border had at least as many automobiles with Mexican license plates as cars with California plates.

Some of this growth is occurring at the expense of farmland. According to the Department of Conservation, about 1,000 acres of farmland was converted to urban uses from 2000 to 2002. Locals say the rate has increased during the last two years. But, County Planning Director Jurg Heuberger noted, most growth is going in incorporated areas and a few designated unincorporated communities. The county general plan adopted in 1993 designated 60,000 acres, nearly all in and around cities, for urban growth. Development outside those areas is prohibited to protect agriculture, Heuberger explained. Additionally, the Imperial County Local Agency Formation Commission requires detailed service area plans before allowing any government entity to annex new territory

The annexation business is brisk. Heuberger, who doubles as the county's LAFCO executive officer, said at least 15 annexations, ranging from 80 to 600 acres apiece, are on the drawing board.

There is no serious local opposition to development. McMillin's Jarrett said the entitlement process in Imperial County is “far easier than it is anywhere else in California.” Of more concern locally is the deal that requires the Imperial Irrigation District to sell roughly 10% of its allotment of Colorado River Water to the state Department of Water Resources and the San Diego Water Authority (see CP&DR, November 2003; CP&DR Environment Watch, December 2002). The deal has already resulted in the fallowing of about 190,000 acres of farmland.

Jurg Heuberger, Imperial County Planning Department, (760) 482-4236.
Doug Russel, Imperial County Board of Realtors, (760) 353-1799.
Rick Jarrett, Corky McMillin Companies, (619) 477-4117.
Paul Magaña, Imperial Valley Development Company, (760) 455-4967.