A version of this blog first appeared in the Portland Business Journal shortly after the ULI What’s Next event on March 7, 2012.
The Oregon Chapter of the Urban Land Institute promoted their breakfast seminar based on ULI’s most recent publication: “What’s Next? Real Estate in the New Economy“: A paradigm shift is unfolding over the course of this decade, driven by an extraordinary convergence of demographic, financial, technological and environmental trends. Taken together, these trends will dramatically change development through 2020
Walking over to the event at the Nines Hotel, I thought about what I hoped to learn. ULI is a national, even international, thought leader in the real estate industry. The advertised intent of the seminar was to examine how our region is postured to remain competitive in the 21st century. I had more short term goals. I wanted to know how ULI and local business leaders foresee the Portland region and the state getting out of the building slump (and consequent unemployment for planners, urban designers and other built environment professionals) we have been in since 2007.
From an examination of name tags, the audience for this event were largely lawyers, a few planners and a few commercial real estate consultants. I didn’t see any developers that I recognized—albeit my recognition field is limited.
After a string of men from ULI’s national office in Washington, DC offering their wisdom over the past two years, it was refreshing to have a woman as keynote speaker. Maureen McAvey started off her talk with the proposition “This is not just another real estate cycle but a fundamental change.” She went on to make her case through a litany of demographic factors she claims are leading to new trends, e.g.:
- Gen Y is the largest generation in American history—80 million strong and still growing and
- The Boomer generation is living longer–“If I retired at 65 and lived to my mother’s age—98—I’d have more than 35 more years to do what?”
I had been wondering when ULI would jump on the jobs bandwagon in a big way. This was the event! Both in her presentation and in the book, McAvey asked “Where the hell are the jobs?” (resisting her editors plea for more sedate wording). Even lawyers are outsourcing parts of their business as never expected. Social Security in 1945 each worker was supported by 42 workers, in 2009 just 3.
Lumina Foundation found that young people in US do not have enough education to compete. Between now and 2018 Oregon is expected to create 59.000 jobs – but there will not be enough workers with post secondary education to fill those job needs. America is significantly de-funding its education.
McAvey believes there are some bright spots. Business and professional sectors and education of all types as well as health care and medical have grown phenomenally. “America is still wildly entrepreneurial and leads in venture capital” she claims. This is partly due to the creative culture and substantial capital reserves.
The Housing Outlook she presented was similar to what I have heard for the past few years: Apartment living is on the rise. Six million new renter households may be formed between 2008 and 2015, requiring 300,000 new units annually compared with just 100,000 produced in 2010. “But can the industry deliver that amount for the rents at which people looking to rent can afford?” she asked. Meanwhile, more single-family homes are being occupied by renters, changing the feel and politics of suburban communities.
Seventy-five percent of households in Portland do NOT have children under 18; 47% are non-families, she said. Twenty-somethings on tight budgets prefer places to congregate with friends—in parks, bar scenes, restaurant clusters, and building common areas—and can tolerate smaller living spaces, McAvey claims.
The Regional Panelists consisted of Jill Eiland, Corporate Affairs Manager, Intel Corporation; Keith Leavitt, General Manager of Business Development and Properties, Port of Portland; Sandra McDonough, President and CEO, The Portland Alliance, Wim Wiewel, President, Portland State Universtiy
McAvey went on to ask a softball question of most of the panelists—and most responded in predictable ways, e.g., Keith Leavitt feels that we need to continue and expand efforts to export wheat and other grain to the world as well as electronics. “There is a boom in new port developments along lower Columbia River,” he said.”
Sandra McDonough believes that we are hampered by tax policy, physical infrastructure and regulatory framework – a lot of it from the 70’s [referring to Oregon’s land use laws]. “We do not have enough sites for new industrial users,” she maintains.
Wim Wiewel feels we need to move beyond the sad state of education funding from legislatures (not only here, but across the country) and partner more with industry—and with local government. He was excited to announce “We are working with the Mayor and the County on an Urban Renewal Area for Education.”
McAvey’s question for Jill Eiland was a little more challenging. “Is Intel going to follow Amazon’s lead and start building highly urban campuses?”
Although I spaced out during Eiland’s answer, she later told me that “Intel has now invested more than $20 billion in Oregon since 1974. We continue to invest and grow our manufacturing and R&D capacity here. The Hillsboro site remains Intel’s largest and most comprehensive site anywhere in the world.” I interpret that to mean don’t expect Intel to move into downtown Portland, or even downtown Hillsboro, anytime soon.
I heard recently that Metro Council Members were cautioned not to talk about climate change. Governor Kitzhaber and Mayor Adams didn’t mention it in their recent State of the State/State of the City speeches at City Club either. It seems that ULI got that memo too.
I was a bit baffled to attend an event on trends that made no mention—only guarded allusion to—the two big trend topics of the day in my world: climate change or growing income inequality! While ULI played up this event as being about a paradigm shift, their Oregon panel members gave only predictable answers that did not reflect much awareness of that shift–none of that Oregon leadership that we witnessed in the last century. It would seem that we are resting on our laurels rather than embracing the shift. I left with more questions than answers—but eager to read the copy of “What’s Next? Real Estate in the New Economy” that ULI so generously provided to attendees.
Mary Vogel is founder and principal of PlanGreen, consultants on walkable urbanism. She is a Board Member and Advocacy & Alliances Chair of the Congress for the New Urbanism Cascadia Chapter where she helps to shape climate change policy. She is also a member of the progressive business alliance, VOIS.