Holiday Forecast for 2009
Uncertainty Creates Opportunity?
Despite the loss in municipal revenues from reduced property taxes, retail sales taxes, and other business-related taxes, municipalities will improve their futures and the wellbeing of their citizens by:
Capitalizing on the shift to public transit induced by gas price hikes with investments that increase the perceived quality and safety of transit systems;
Encouraging mixed-use, relatively high-density new developments for Baby Boomers and Generation Y's to live in the center of the action and near the retail, commercial and research innovators of the next decade;
Exploiting the trend of infrastructure privatization, but regulating inherent monopolies so that providers cannot charge more than an adequate return plus costs, while assuring reserves for on-going maintenance;
Facilitating the continued affordability of housing and other uses by easing entitlement restrictions, so competition will keep prices from zooming back up once the current inventory overhang is sold off and the capital markets revive; and
Giving priority to density and height increases, along with other development-encouraging regulations fought by NIMBY's, at locations where higher density will encourage more efficient development patterns, allow the private market to replace obsolete structures, and reduce reliance on the automobile.
The private sector will generate future profits by:
Controlling and programming sites where development would augment the diversity of existing mixed-use activity nodes, or creating new, mixed-use activity centers positioned to attract large numbers of Boomers and Y's;
Basing development and marketing decisions on in depth knowledge of who will be their buyers or renters, what they will pay for, and why; and
Reducing full-time staff by more frequently partnering with other firms that can supplement internal expertise.
In a time of uncertainty and frozen capital markets, public and private sector enterprises that drop opportunities they never had, and instead focus resources on market responsiveness, will prosper in 2009 and beyond.
Gruen Gruen + Associates wishes you and your family a healthy, happy, peaceful and prosperous New Year.