With the State of California facing one of its driest years on record, earlier this year Governor Jerry Brown proclaimed a State of Emergency directing state officials to take all necessary actions to prepare for severe drought conditions. The proclamation noted that California's water supply had dipped to "alarming levels" presenting "urgent problems."
While the present drought has significant statewide economic implications, those implications are most commonly correlated to California's agricultural industries. The Public Policy Institute of California reports that large cuts in crop acreage will be unavoidable, with some farmers forced to cut back on high revenue fruit, vegetable, and nut crops.
For the commercial real estate industry, the drought also has significant economic implications. Without certainty in water supply, the ability of commercial real estate development to contribute to a region's economic activity and fiscal health (through construction and permanent job growth, tax revenues, and long term business operations) may, and likely will, be limited.
Read the article here.