Published October 2003

Key issues to consider before casting your vote

As we plow through the current election season, real estate investors are watching closely to see where those running for political offices land on some key issues:

Jobs
This is the overriding focus. All good things in investment real estate flow from business expansion and resulting job growth.

Apartment properties are still suffering from a low interest-rate climate that has been pulling renters into home ownership at a strong clip for the past several years. From a broader economic and social perspective, low interest rates are a good thing if they result in more home ownership. But low rates mean customer bleed-off for the rental property investor.

For much of the ’90s, low rates really didn’t hurt rental housing investors that much since the economy was creating enough new jobs to generate positive migration into Snohomish County. But the double-whammy of low interest rates and employment contraction since 2001 has been too much to overcome for the rental housing market.

Vacancies are at near all-time highs, and the economics of rental housing investment are challenging in the areas hit most directly by Boeing’s layoffs and the spin-off there.

Office and retail properties rely on healthy businesses to maintain occupancy, so the need for job growth translates the same in both of these property types.

We need elected officials who will work to break down the barriers to business expansion.

Business will recover on its own and job growth will be the byproduct, but government needs to get out of the way and quit chipping away at business so that it can. Then, when times get good again, these same officials need to maintain discipline so that we don’t let history repeat itself.

If Boeing comes out of this airline industry malaise, for example, we’d better keep taking them to lunch and find out what more it will take to help them — and other employers — keep the jobs they’ve created here. If politicians make the mistake of conducting some sort of political victory dance should they save the 7E7, they missed the point.

Diversifying the economy
Candidates that “get it” in this area are the ones real estate investors should support. “Get it” in this case means recognizing that our county cannot be a one-horse town. But it’s not an either/or proposition to keep or replace Boeing. Just the opposite. It’s more of a “Wow, we have a lot to offer beyond just Boeing” revelation. Elected officials who support diversifying the economy here will establish their legacies for generations to come.

Infrastructure
Snohomish County is an extraordinarily attractive place to live and work. Especially when compared to living in Snohomish County and fighting traffic to work in the major employment centers of Seattle and Bellevue.

Cutting out a commute by attracting businesses to locate closer to where people live means more time for them to play (translate: spend money locally) and anchor themselves in the community.

Snohomish County, like other fringe communities around large metropolitan areas, is poised to benefit from its geography and the fact that people would rather work where they live. Fostering this continued force for business growth is something that real estate investors ought to look for in a candidate this season.

And when the economy does recover, it’s the candidates who will remember the belt-tightening times of today and apply themselves to business expansion efforts and a diversified economy — and who recognize Snohomish County’s unique advantages as a place to live and work — who real estate investors should look for.

Tom Hoban is CEO of Everett-based Coast Real Estate Services, a property management and real estate advisory company specializing in multi-family and commercial investment properties. He can be contacted by phone at 425-339-3638 or send e-mail to tomhoban@coastmgt.com.

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