government – Real Estate Matters
Browsing Tag

government

Commercial Lending, Commercial Real Estate, Government Policy, Industry News, Minnesota Real Estate Hall of Fame, Real Estate Trends, Upcoming Industry Events, Upcoming UST Events

Why real estate has become a drag on the economy – a year in review.

chartsLast October, Dr. Anthony Downs provided the keynote address at the first annual Minnesota Real Estate Hall of Fame induction ceremony. His address, Why real estate has become a drag on the US economy was a realistic, unvarnished assessment of the issues that our country was facing at the time. He noted that in previous recessions, real estate had often led the way to recovery. Today, however, real estate is a serious drag on our economy’s ability to return to prosperity.

Dr. Downs will return to the University of St. Thomas on October 26 to present the keynote address, “2012 Real Estate Market Update” for the second annual Minnesota Real Estate Hall of Fame induction ceremony. In preparation for this event, I looked back at his presentation from last fall and was surprised by how relevant his address remains today. I thought it would be interesting to revisit his remarks to see how they compare to actual events in the last year. 

Most of the key issues that Dr. Downs mentioned last year are still with us today and many of his predictions have come to pass in the ensuing year. Here are several examples:

Unemployment. Dr. Downs observed “high rates of employment are likely to continue for several more years”. He mentioned consumers will not have the cash to increase spending and small businesses will have little reason to hire more. Related to employment he foresaw “no sudden change in conditions is likely to radically increase the demand for new workers and for new production”. Looking at the national employment rate that has been hovering at just over 9% and the Minnesota rate that has been over 7% since last fall with little prospect of near term improvement, his observations seem to be right on. Continue Reading

Commercial Real Estate, Industry News, Real Estate Trends, Uncategorized

MN State Shutdown Day 13: Impact on the Local Economy

capitol

While many Minnesota businesses and most of us in the real estate industry are not seriously impacted by the shutdown yet, there is still cause for concern.  Now in Day 13 of the shutdown, it is already one of the longest in our country’s history.  In the meantime while 22,000 state workers are out of work, the shutdown affects everyone from citizens who depend on social services to vacationers traveling to state parks to professionals who rely on state permits or licenses to do business.  In the press lately are many accounts of individuals who have been affected.  The question we are posing at St. Thomas, is how are local businesses and real estate being affected?  If the shutdown is having an impact on your business or real estate sector, we encourage you to submit your comments at the end of this post.

Several Minnesota agencies that provide support to businesses and real estate are experiencing adverse effects or are shutdown completely.  Minnesota Housing Finance, the state’s affordable housing bank, is under a partial shutdown.  Loan servicing is still available but new applications may be delayed due to reduced staffing.  Forgivable loans available through the state to homeowners affected by the North Minneapolis tornado are also on hold.

Commercial barge traffic on the Mississippi River may be restricted as early as this week, according to the St. Paul Port Authority, which is obligated to “keep its waterways open for commerce.”   BargeOn Friday, SPPA’s counsel Eric Larson appealed the state’s move to suspend its dredging permits during the shutdown, citing that closure of just one of its four river terminals will result in 6,000 tons of commodities per week being unable to reach its destination.  That’s the equivalent of 200 semi-trucks of product and includes staples such as livestock feed, water treatment chemicals, and recyclable metals, some of which are shipped from international locations.

Continue Reading