But the Inland Empire’s warehouse boom has turned what once was a serene escape into a never-ending chorus of beeping loading docks surrounded by staggering gray walls. 

When I first covered this topic in my article with the Frontline Observer, I approached it not just as a first-time journalist but as a resident of Rialto. I live right across from the Target Distribution Center. As I’m writing this, I hear beeping trucks outside my window. 

The noises and obstructed views alone raise pertinent issues, but reporting on warehouse development made me realize the true cost of warehouses is much worse. 

What once was white noise to me, blending into my everyday routine, became a sounding alarm for the action that needs to happen for the region’s future. 

Community members have already been sounding the alarm for years. On Tuesday, Nov. 18, the Perris City Council voted 5-0 to draft a moratorium that will be considered on Dec. 9. 

The decision reflects the community’s initiatives towards confronting the cumulative impacts of warehouse development. 

With nearly 4,000 warehouses concentrated in the region, most of which rely on diesel trucks that release nitrogen dioxide, the transportation and logistics industries are jointly responsible for growing environmental and health concerns. Both San Bernardino and Riverside counties rank among the top five most ozone-polluted areas in the United States, posing a greater risk to the communities within the region.

The demand for online shopping transformed the Inland Empire into a hotspot for warehouse development. To meet growing demands during the pandemic, corporations rushed to construction without considering the proximity of warehouses next to neighborhoods, schools and parks. 

Two warehouses in Bloomington are located less than a mile from Joe Baca Middle School. Caitlin Towne, an educator at the school, says many of the students suffer from asthma. 

Granted, the number of warehouses across the Inland Empire has opened many jobs to the community. Currently, the transportation and logistics job category is second in job growth, with projections of a 1.7% increase by 2028. 

Towne says many of her former students were working at warehouses in Fontana and Bloomington during the height of the pandemic.

What seems like a great economic industry for the region is, however, an overreliance on low-wage labor. Transportation and logistics are among the lowest-paid positions available, according to the University of California, Riverside’s Inland Empire Labor and Community Center. 

Many residents in the Inland Empire endure pothole-filled roads and congested commutes only to work low-wage, high-risk jobs. Some residents even have to travel outside of the region to get a fulfilling and well-paying job.

Even more concerning is that the low-wage jobs available in the region may be cut in half as automation is expected to expand to cut costs and increase efficiency. 

As of August, the Inland Empire’s unemployment rate was 6.1%, surpassing both California’s seasonally adjusted 5.8% and the nation’s 4.5%. 

Many people are struggling to make ends meet. Entering the workforce and landing a job in logistics isn’t much of a choice, but it is the only option. As Towne said to me, “It’s almost like that’s all they expect of the people in Bloomington is to just work in a warehouse.”

The Inland Empire – a place that offered many homeowners mountain views is now covered in lines of warehouses. We have reached a dead end, and the dead end is warehouses. Caring about the environment and the region’s economy are not mutually exclusive. We must care about both our economy and our environment. 

We have seen what courageous community involvement can do for the region. The dead end that we have long faced with warehouses does not have to define our future. We can use our voices to pave a new path for ourselves by calling on our city leaders to make these changes.  

To ensure a promising future, both economically diverse and environmentally sustainable, we must demand more than warehouses. Warehouses and low-wage positions shouldn’t come at the cost of the community’s public health, quality of life and environment. 

The Inland Empire residents deserve to breathe freely and find peace in the comfort of their own backyards.

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That’s how much new logistics space is potentially on the county’s horizon, according to Riverside environmental consultant Mike McCarthy.

Using publicly available data, McCarthy found that Riverside County is home to seven of the 10 biggest warehouse projects being studied for their environmental impact in California.

The projects, stretching from the desert city of Cathedral City to the Temescal Valley south of Corona, don’t include what’s already been approved, including the World Logistics Center, which will add 40 million square feet of warehouses to eastern Moreno Valley.

It’s enough to make McCarthy, a critic of adding warehouses, question how the county is going to handle it all.

“There’s already a ton of warehouses in the pipeline, and then we’re going to add a whole bunch more onto it, and I just don’t see that we have the infrastructure to handle it,” he said.

Alicia Aguayo, a spokesperson for the San Bernardino-based People’s Collective for Environmental Justice, lamented the prospect of more warehouses in a logistics-saturated Inland Empire.

“It’s unfortunate that the industry continues to expand in our backyards because we do not have the protections or reassurance that there will be enough mitigations to offset more toxins into a region with the worst air quality,” Aguayo said via email.

More warehouses means more jobs, argued Paul Granillo, president and CEO of the Inland Empire Economic Partnership.

He cited a new U.S. Chamber of Commerce study, which found that, among other benefits, a new Inland distribution center creates more than 3,300 jobs outside the warehouse and generates $51 million in local tax revenue.

“We have to find a way to appreciate the upside of the economic impact of logistics and make sure we’re mitigating against the downside,” Granillo said.

The projects on McCarthy’s list are subject to downsizing and changes if and when they are approved, and it’s possible they won’t entirely consist of warehouses, since warehouses’ industrial zoning opens the door for manufacturing or other non-logistics uses.

Who approves the projects depends on where they are. Cities have land-use authority within their boundaries while the counties control what gets built in unincorporated areas.

An hour’s drive from the ports of Los Angeles and Long Beach, the Inland Empire — home to rail yards, freeways, plenty of flat undeveloped land and a blue-collar workforce — is home to a massive logistics industry with few peers worldwide.

As of 2022, the region had an estimated 1 billion square feet of warehouses. A steady stream of big rigs supply warehouses approaching 1 million square feet or larger, providing local jobs for thousands of workers fulfilling online orders for Amazon, big box stores and other retailers.

Logistics is credited with helping the Inland economy avoid the worst of the COVID-19 pandemic, and companies like Amazon argue that their Inland facilities offer a ticket to a free college education and a middle-class life.

Critics counter that most warehouse jobs offer substandard wages and benefits in hazardous work conditions. Warehouses also are blamed for noise and light pollution, and emissions from warehouse-bound, diesel-powered trucks are linked to cancer, heart disease and other health problems.

To make his top 10 list, McCarthy used data from CEQAnet, a state database of projects needing a California Environmental Quality Act review before they can be approved.

Large warehouses often need environmental impact reports or EIRs — in-depth studies, hundreds or thousands of pages in length, that analyze what a project will do to the local environment if built.

Topping McCarthy’s list is the Westside Annexation project in unincorporated Los Angeles County. The project near Lancaster would add up to 38.5 million square feet of warehouses.

Next is a 24.8 million-square-foot project in Northern California. Third on the list is the San Jacinto Commerce Center, a 9 million-square-foot project sought for 514 acres between Record Road, Odell Avenue, Sanderson Avenue and Cottonwood Road.

The next six projects are in Riverside County:

• CV Conference Center in Cathedral City (7.9 million square feet)
• Serrano Commerce Center in the Temescal Valley (6.5 million square feet)
• Beaumont Heights Business Centre Project in Beaumont (5.7 million square feet)
• Harvest Landing Retail Center & Business Park Project in Perris (5.7 million square feet)
• Mesa Verde Specific Plan in Calimesa (4.4 million square feet)
• New Perris Commerce Center Specific Plan Project in Perris (3.7 million square feet)

In all, the Riverside County projects total 42.9 million square feet. Also making the list is the Lake Creek Logistics Center project — 3.5 million square feet — in the San Bernardino County High Desert community of Apple Valley.

McCarthy said it’s possible warehouse developers are eyeing Riverside County “because there’s a little bit more undeveloped land in Riverside County than in the inland parts of San Bernardino County.”

His list doesn’t include projects in various stages of development in Riverside and San Bernardino counties. For example, there’s the 3.2 million-square-foot Bloomington Business Park in unincorporated San Bernardino County.

The list also doesn’t include the 7.3 million-square foot Stoneridge Commerce Center sought for the unincorporated Riverside County community of Nuevo and the West Campus Upper Plateau, a 4.7 million-square-foot project envisioned for ex-March Air Force Base land near Riverside that’s currently stalled.

McCarthy worries Riverside County is ill-prepared for more warehouses.

“There’s the air quality impacts, there’s the land use impacts, the environmental justice impacts … and just the congestion and traffic impacts,” he said. “And so each of these individual projects have all of those problems. But put them all together and it just amplifies it.”

Unlike San Bernardino County, which has more rail infrastructure, more goods would have to be moved in Riverside County by truck, McCarthy said, adding that warehouses are being built further and further from the ports, requiring longer truck trips.

“It’s the worst kind of logistics sprawl,” he said. “So I think the question is, what is the overall plan?”

Riverside County analyzes development projects on a case-by-case basis and tailors conditions of approval — landscape buffers and noise limits, for example —  to each project’s location, John Hildebrand, county planning director, said via email.

“Roadways are widened and utilities are installed or upsized to accommodate the growth,” Hildebrand said, adding the county uses “good neighbor” standards to ensure warehouses in unincorporated areas are compatible with their surroundings.

He also noted that a new state law, AB 98, sets development standards for new warehouses requiring landscape buffers and other measures to lessen the effect on neighborhoods.

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The e-commerce giant plans to hire more than 2,000 full-time and part-time workers to staff two new facilities in Fontana and Jurupa. The new facilities, called “inbound cross docks,” launched operations earlier this month and are designed to receive cargo and sort merchandise to send to fulfillment centers, which handle customer orders.

Paul Granillo, president and chief executive of the Inland Empire Economic Partnership, said in a news release on Tuesday that the infusion of new jobs represented a “significant boost” to the local economy.

Granillo said in an interview that Inland Empire communities depend heavily on logistics jobs, since starting wages are typically higher than minimum wage. And the logistics sector was one of just three in the region that saw job growth in 2024, along with healthcare and government, he said.

“Amazon is probably our largest private employer and is important to the economic vitality of the region,” Granillo said.

The new Amazon jobs offer starting pay of $20.75 per hour and benefits such as healthcare, dental and vision coverage, a 401(k) with company match and up to 20 weeks of paid parental leave, according to Amazon spokesperson Carly Levy.

The new positions will be added to Amazon’s website in the coming weeks, she said.

Michael McCarthy, an adjunct professor of environmental analysis at Pitzer College had a less rosy view of the region’s freight and logistics sector. He said tariffs being pursued by the Trump administration don’t bode well for Inland Empire warehousing. And, he said, growth in freighting has slowed in the years since the pandemic boost, with warehouses seeing higher job vacancy rates.

“We are overly dependent on warehousing. Devoting such a large share of our land use to it and not diversifying our economy is a problem,” McCarthy said.

The opening of new facilities comes amid tensions over environmental impacts of industrial development in the region. Developers have pursued properties along Inland Empire freeways, demolishing neighborhoods to make way for industrial facilities to convert the area into a logistics corridor for e-commerce arriving in Southern California ports. Community activists and residents have pushed for limits on this type of development, which they say drives pollution, traffic congestion and other problems.

Last year Gov. Gavin Newsom signed a hotly contested bill that established new standards for building and design of industrial warehouses meant to protect the health of residents in surrounding areas. The legislation, which will go into effect in 2026, faced major opposition from those who saw it as a job killer, putting restraints on economic opportunity and infrastructure development.

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The location has good visibility and direct access to the major trade route Interstate 10 and can serve the Southern California ports to the West region.

The property is entitled and ready for development. Shopoff anticipates breaking ground in the third quarter of 2024, and the project is expected to take 12 months to complete.

Ian DeVries and Chris DeVries of Colliers International along with Brad Yates and Stefan Pastor of Stream Realty will handle tenant lease up. The firm will begin marketing the projects to tenants prior to project completion.

Upon completion, the project will total more than 1 million square feet, with 167 docks, 498 trailer stalls and a 42-foot clear height.

Stream Realty Partners Executive Vice President Brad Yates told Commercial Property Executive that as e-commerce and consumer demand continue to grow, the need for large-scale warehouse facilities is expected to increase. Desert Hot Springs, with its available land, infrastructure and proximity to major markets, presents opportunities for the expansion of million-square-foot warehouses to meet the evolving needs of the logistics industry.

I-10’s significant role

Interstate 10 plays a significant role in the economic landscape of Arizona and Southern California, serving as a major commerce corridor that fuels economic growth. Here are some key incentives and benefits it brings to the region:

The I-10 corridor runs across the U.S. from California to Florida, connecting major ports, cities and markets, and is a vital route for transportation and distribution.

Tanner Jansen, Stos Partners vice president of Acquisitions, told CPE that recent strikes by the dockworkers backed up ports’ production, but that has since been resolved and their supply has increased.

“There’s been larger demand due to the reduction of Panama Canal traffic from the drought conditions in Central America,” Jansen said. “This delay is causing increased cost, and some logistics demand that typically lands on the east coast, is landing on the west coast and is being transported across the country.”

“California and the West Coast markets are also seeing a recent reversal in their population declines that they suffered during the pandemic, which will bring back further demand for warehousing along the I-10,” Jansen added.

Improving the corridor’s infrastructure

Significant investments have been made to improve the corridor’s infrastructure, according to Yardi Matrix’s Doug Ressler.

The San Bernardino County Transportation Authority and the California Department of Transportation have invested in adding Express Lanes to I-10 in San Bernardino County, which will improve travel time and relieve congestion.

The project components are expected to yield a benefit/cost ratio of 8.0, representing over 500 million person-hours of savings over a 20-year analysis period. Freight benefits are estimated at $1.4 billion over the same period.

The corridor is being upgraded to address a nationally significant freight bottleneck, which will improve the efficiency and reliability of regional freight flows.

I-10 is considered the backbone of the transportation system, providing businesses and their customers with essentials like food and fuel. The interstate supports Arizona’s position at the heart of a regional economy that stretches from Southern California to Texas. This trillion-dollar market relies on I-10 for efficient links to trade and commerce.

Arizona has invested significantly in I-10, with projects such as widening the highway between Phoenix and Tucson. This $400 million investment aims to alleviate traffic pressure, improve public safety and accelerate future growth. These improvements and expansions of I-10 also position Arizona to receive additional federal funds, which can further enhance the state’s transportation infrastructure and economic prospects.

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California has the highest state unemployment rate, at 5.3%, beating Nevada by 0.2 percentage points. South Dakota is in first place with 2.0%. While we do not see you packing your bags for a move to the Badlands or even a stay in a luxury hotel in Pierre, all jokes aside, these are significant unemployment rate differences between states. The national unemployment rate is 3.9%. There are, potentially, other, more attractive alternatives, such as Texas (4% unemployment rate) and Florida (3.3% unemployment rate). These states have seen higher employment growth combined with higher in-migration (Texas will gain two Congressional seats, Florida one).

Here in the Inland Empire, the published (non-seasonally adjusted) unemployment rate stands at 4.8%. However, the Employment Development Department does not remove regularly occurring seasonal fluctuations, as is done for state and national data. This is not a good gauge of economic performance, just like you would not look at morning temperatures to make statements about the average temperature of the day. Using standard statistical techniques, the (seasonally adjusted) unemployment rate for the Riverside-San Bernardino-Ontario Metropolitan Statistical Area becomes 5.4%, topping the state rate. Within Southern California and using raw data, we are the “leaders” with Orange County at 3.9%, San Diego County at 4.3%, and Ventura County at 4.6%. Los Angeles County is tied at 4.8%. We fully understand that Riverside and San Bernardino counties saw better times during the earlier phases of the coronavirus recovery when the logistics industry was booming, but here we are in June 2024.

We want to stress that unemployment, at this point, is not necessarily something to worry about, especially when the main concern of many employers is to find qualified workers. Instead we want to point to two facts: Even though the Inland Empire unemployment rate is basically the same as the state unemployment rate, there are many more positive aspects to the regional labor market; and given the current levels of the unemployment rate at full employment, we are pessimistic about the state’s future economic performance. This is not the case for the regional economy. We look at the current relative standings as a predictor of how the state and regional economy will develop.

The state-to-state and regional comparisons need more context to determine “how bad is bad.” At the state level, the bad news may be tempered by the fact that California unemployment rates are typically higher than national numbers. Looking back as far as 1990, the state’s unemployment exceeds the national rate by an average of 1.3 percentage points. That gap narrows during good times. During each of the last four business cycles, the California unemployment rate is only 0.6 percentage points higher compared to the national rate in the late stages of the economy’s expansion, almost half the current difference.

Although the Inland Empire’s unemployment rate is higher than it was a year ago, the current rate is considerably lower than the region’s average of 7.8% since 2010. And over the same period, the region’s unemployment rate has exceeded the state’s by an average of one-half percentage point, making the current 0.1 percentage points gap seem less concerning.

Unemployment rate differences between regions/states are typically explained by differences in socio-economic factors. A region such as the Inland Empire, where only about 25% of residents have a bachelor’s degree or more years of education, will have higher unemployment rates.

There are significant differences in recent trends between the state and the region.

Comparing the current situation to the last few months of the record-breaking economic expansion, which ended with the pandemic shutdown in early 2020, the labor force in California is almost a quarter of a million people smaller for April 2024 when compared to February 2020. It gets worse for employment.

According to the residency survey: there are 413,000 fewer workers than there were prior to the pandemic. Since the change in the unemployment rate is about equal to the growth in the labor force minus the growth in employment, the unemployment rate has increased from 4.4% to 5.3%. This is a bad case scenario: the major reason why the state unemployment rate is “only” at 5.3% is because we experienced the Great Resignation — people dropping out of the labor force either because they could not find a job, took early retirement, or left the state. Without the labor force shrinking, the current state unemployment rate would be 6.6%.

In a healthy labor market, employment growth coincides or exceeds labor force growth. That is not what we currently observe for California.

Contrast this with the Inland Empire. The situation here is almost the opposite. The labor force grew by almost 70,000 people or 3.3% from February 2020 to now. Employment also increased but not quite as much, namely by roughly 41,500 people or 2.1%. Hence the only reason why the Inland Empire unemployment rate went up by 1.2 percentage points was the inability for our area to find jobs for all of those who moved here and entered the labor force. Had the labor force not grown, then the unemployment rate in the Inland Empire today would stand at a remarkable 2.9%. This is in stunning contrast to the situation for California.

Some may counter that we have given California too bad a rap.

While the residency survey shows a decline in employment by over 410,000, there is an alternative survey, based on establishments, that shows California employment actually growing by 314,000 over the same period. There are a variety of reasons why the household survey can differ. Most relevant for the Inland Empire, the household survey includes commuters while the establishment survey only looks at employment within the two counties. But it is unusual to observe such a large difference at the state level. You would find more workers in the establishment survey if there was a significant number of jobs held by individuals who have moved out of the state while working remotely, or if they had immigrated recently and found jobs but the U.S. Census had not documented their addresses — yet. At any rate, it is a puzzle. Even so, employment in California, based on these more positive establishment survey numbers, grew by only 1.8% from February 2020 to now. If you look at the same numbers for the second and third most populous states, then you find that Texas employment grew by 9.2%, and 9.5% for Florida. Characterizing California’s labor market performance as abysmal hardly changes.

Looks can be deceiving for both the Inland Empire and California if you just focus on the headline unemployment rate numbers. While both areas show almost identical unemployment rates, our region is actually doing relatively well, with an elevated unemployment rate due to adjustments from the logistics industry hiring boom following the coronavirus recession and initial recovery, and the labor force and employment growing relative to the economic peak in 2020.

California outlook is mixed, given that nonfarm jobs exceed pre-pandemic levels, yet its labor force and household employment numbers remain persistently below pre-pandemic benchmarks. With the state facing cuts due to a large projected budget deficit and automation likely accelerating because of increased minimum wages in fast food restaurants and in the health industry, the economic outlook for the state is cause for concern. Expect further bad news with additional losses of Congressional seats, and more workers and firms exiting the state unless significant policy changes are made.

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