Posts Tagged ‘real estate’

The roots go back decades and we are reaping today what leaders sowed many years ago. Home building and real estate activities deliver shy of $3b per year to our economy.   Unless and until we diversify away from growth related industries thousands of Tucson residents will be dependent on growth for their livelihood. Is that bad?

 Roger Yohem VP of SAHBA summed it up pretty well. Read the full article HERE:

Anti-business genesis

From a development perspective, a complex maze of reluctant leaders, ingrained employees and citizen resistance are the roots of the anti-business policies coming out of Tucson City Hall.

City leaders “have to direct staff to develop standards and the process for encouraging development,” said a builder. Instead, the “entrenched bureaucracy” won’t allow progress to happen.

“Staffers have their own personal agenda, which I believe, is no growth,” he added. “The result is anarchy.”

A former member of the City Council spoke of the process. If an assignment conflicted with a staff member’s agenda, it was stonewalled. The official confronted employees and a typical response was: “I’ve been here almost 20 years, you’ll be gone in four and I’ll still be here.”
There is no pressure to perform. And many employees are protected by a union.
“They can’t be fired, so many feel bullet-proof. They don’t have to answer to anybody,” said a director of SAHBA.

The city’s anti-business movement “got legs” during the terms of Democratic mayors Tom Volgy (1987-91) and George Miller (1991-99). Both had won council seats in 1977.

“As no-growthers, they started to empower extremists and staff to follow their lead,” the SAHBA director said. “The people they hired decades ago are killing today’s redevelopment efforts. Many have moved up into policy-making positions with their negative attitudes toward progress.”

Regarding the conflicts of business versus neighborhoods, Volgy once said, “It’s hard for business groups to understand what the neighborhoods want, and vice versa. It’s very hard to put themselves in each other’s shoes.”

Yet Volgy’s “Kumbaya” thesis never developed into a serious collaboration. The narrow-minded NIMBY (Not In My Back Yard), BANANA (Build Absolutely Nothing Anywhere Near Anything), and NOTE (Not Over There Either) protesters trumped progress.

As the city’s finance director told the council this spring, income from sales taxes will be flat in 2008 for the first time in 30 years because, “There’s no growth.”

No political cover

City leaders lack the political grit to confront the no-growth crusaders. Proposed projects fade away despite the widespread benefits.

“A radical minority dictates city policy,” says a SAHBA director. “There’s a handful of people who claim to represent neighborhoods but they really don’t. It’s always the same two or three people, who have become the city’s de facto planning department.”

One way to restore balance is to give politicians political cover. Development dissenters should get 60 days to prove their claims about traffic, property values, and other concerns.

“Make neighborhoods do what developers are required to do. Pass a mandate that they prepare and pay for their own study,” he said.

The Tucson region has rested on it’s great climate and influx of new residents for virtually all our economic development. We have three industries that run are the overwhelming economic engines in our region. The big three are; construction and real estate related activities, tourism and the government sector. GTEC settled on bringing in low paying call centers and is no longer in existence. (GTEC background HERE.)  TREO is working on their blueprint and point to successes but at the end of the day the big three still dominate our economy. Info on the 2008 blue print HERE.

Real Estate and construction related activities which are fueled long term by people’s desire to move to our region. This industry was super heated during the sub prime boom and bust we are currently experiencing. We will recover but the bitter pill will be hard to swallow for the short term. The slump started back in 2007, just when the County was INCREASING their staff. 
 

The slowdown was clear by January or February, said Tom Doucette, owner of local builder Doucette Communities.

“I’d have to be awfully skeptical to criticize that decision (to hire), but it seems they ignored the signs of what was happening,” Doucette said. “They hear the development community say things are bad, and they think we just don’t want to pay more fees.”

Tourism is way down all over our valley. The national economic pressures are causing ripple effects all over our region. Tucson International Airport is loosing flights and airlines, bed taxes are down, people are being laid off and again the near future doesn’t look good.

The government sector which makes up 7 out of the top 10 employers in our region is finally starting to slow. The UofA is talking about cost cuts, City and County coffers are slowing down causing departments to downsize. From the federal to the state to local government we are in for the biggest drop in revenue and slow down than we’ve seen in decades.

As a community we live and die on NEW MONEY entering the system. With pressures on our big three industries our NEW MONEY supply will dry up and the circulation system will slow to a crawl.

Economic pressures on a national level effect everyone. Those communities that have diversified their economic base will weather the storm much better than us. Hold on it’s going to be a bumpy ride.