Housing Forecasts Miss the Big Picture
Are we about to wake up from the deep sleep of the so-called “American Dream?”
Probably my favorite American satirist/humorist, Will Rogers, could always find a way to look at most any situation and respond with a wry and incisive remark. One of his best had to do with his take on the state of the economy, when he said, “An economist’s guess is liable to be as good as anybody else’s.”
So, speaking as one of the “anybody” crowd, I am always amused (and frankly, somewhat confused) upon hearing the latest opinions expressed by those housing industry experts and outside observers who regularly take their best shots at getting the forecast right in hopes it will garner them currency down the road, in one form or another.
Plenty of folks seem to be willing to make predictions for the future, but they stubbornly insist that they are based on the same old antiquated economic formulas that do little more than repeat rides on the endless roller coaster of the bust-and-boom cycles we’ve all come to expect and think of as inevitable.
What this strategy fails to account for are “big picture” factors such as climate change, the future of energy, the transforming workforce, and an honest assessment of what private home ownership is going to look like going forward, and I don’t just mean in the next couple of quarters.
While I freely admit that I have nothing to lose here, I’m willing to go out on the proverbial limb and suggest that we are about to wake up from the deep sleep of the so-called “American Dream” to discover that the ever-widening gap in home ownership between the upper stratas of the market and those at the entry-level and first-time move-up levels will necessitate a complete overhaul of the housing model we’ve all been accustomed to for the better part of a century.
As evidence of what I’m referring to, I point to the growing number of examples where school districts, health care organizations, first responder groups and many other public entities have mimicked the private sector in factoring attainable housing as a critical part of the equation when it comes to recruiting and retaining the workforce members that they need to operate sustainably.
We are not strangers to the concept of the “company town’, as exemplified by the railroads, mining and other large industries. But now we are seeing municipalities leverage housing availability and affordability as a powerful tool to attract and hold onto the workers necessary to support their core industries like tourism, agriculture and manufacturing.
Consider the example of military housing, which, while supporting the look and feel of market single-family and attached dwelling units, historically existed to help compensate personnel for incomes that could not match the civilian sector. The not-so-obvious benefit to this strategy came with the boost in retention that reliable, affordable housing offered those in uniform and their families.
Equally important is realizing that all of this is reflected in expanding public policy, at a variety of levels, that is designed to encourage sustainable housing and support community efforts that are increasingly driven by a multitude of social dynamics rather than simple market solutions. There is a lot more than supply and demand at work in this trending phenomenon, and we can expect that its impact will only continue to increase.
The world is definitely undergoing unprecedented changes, and the shelter industry will need to adapt with the times.