Meeting Review
Author: Julie Gordon
The economy in Colorado and Boulder County is healthy and should continue to be strong in the near future, Dr. Tucker Hart-Adams, U.S. Banks Rocky Mountain Region's Chief Economist, said at Boulder Tomorrow's July 24 luncheon at the Angel Pines Conference Center.
Colorado has experienced more than 10 years of solid economic growth, Adams said. The state's current unemployment rate is 2.2 percent and Boulder County's is 2 percent, according to Adams. Both are much lower than the 4 percent unemployment rate for the country as a whole, Adams emphasized.
A labor shortage is the defining problem for business in Colorado right now, Adams said. She said that while 75 million baby-boomers are moving out of the labor force, they're being replaced by only 42 million Generation X-ers.
Adams touched on the labor shortage in the construction industry in particular.
"Construction is strong in Colorado," Adams said. "It would be far stronger if builders could find the carpenters, the plumbers, the electricians to do the work. Residential developers tell me it takes a good month longer to get a house built."
The regional economy and the city of Boulder's economy are not two different things, Adams emphasized. She said the city of Boulder is not a stand-alone economic unit.
"Boulder exists and is able to exist because it is part of a very large, vibrant economic organism that is composed of a minimum of seven counties along the central part of the front range," she said. "Boulder has to think of itself as a small cog within that organism."
Adams said it's remarkable that inflation has stayed low, hovering at about 3 percent, in the face of oil prices that have tripled and gas prices going up more than 50 percent.
There are too many expensive apartments in Colorado and there's no need for more hotels and motels, Adams said.
Adams also said she doesn't predict many people giving up driving for light rail. Light rail will only make a tiny difference in the traffic congestion, she said.
A Colorado Springs resident; Adams monitors and analyzes local, regional, and national economic activity as well as forecasts interest rates and economic conditions. She publishes quarterly and annual economic forecasts for Colorado, and is president of The Adam's Group, a consulting firm that provides economic analysis, research and forecasting for individuals and businesses.
Adams holds a doctorate and masters degree in economics from the University of Colorado at Boulder and a bachelor's degree in mathematics from Wesley College in Massachusetts. She served as president of the University of Colorado Alumni Association and taught undergraduate and graduate courses at the University of Moscow in Russia, the University of Colorado, and the University of Denver.
Boulder city councilman Gordon Riggle said he was impressed with, and enjoyed listening to, Adam's speech.
"I was particularly struck by Adams' point that Boulder is not an economic island," Riggle said. "Too often in the past we have behaved as if we've had a green moat that protects us from outside forces. That's simply not true."
Rick Brooks, a Realtor with Mock Realty, said he also thought Adams did a good job outlining the economy.
"I think she's accurate in saying that we're going to continue to have economic growth at the rate of 3 to 3.5 percent," Brooks said. "The disheartening part about her talk, which is true, is that we're not going to get Coloradans out of their cars. And then environmental concerns start to weigh on the economy, which is happening right now in Atlanta."
Mike Hesse of Coldwell Banker Commercial NNT Inc. described Tucker as being "down to earth" and someone who has "a lot of common sense."
"She has all the information at her fingertips," he said. "She's very well-versed and well-read."
Hesse said he found the information Adams presented to be exciting. "We need to learn how to prepare for continued high employment and continued lack of skilled workers," Hesse said.
Boulder Tomorrow also sponsored a press conference prior to the luncheon that brought together experts in the region's housing and economy, issues that Boulder Tomorrow is focused on. Panelists included Adams, Phil Shull, chair of the Boulder Urban Renewal Authority and president of Deneuve Design; Caroline Hoyt, co-owner of McStain Enterprises, a residential home building and development company; and Steve Anderson, president of the Boulder Area Realtor's Association who has been in the real estate business for 28 years.
Shull discussed the current state and situation with Crossroads Mall. Both Shull and Adams said that the opening of the FlatIron Crossing Mall wouldn't have much of an impact on Crossroads, since it is already not doing very well. Half of Crossroads, in fact, is empty at the moment.
"Crossroads is not the trendy place to go right now," Adams said. Shull also said that Crossroads was "very much at the maintenance level of doing business right now" and continuing to go downhill.
Adams compared Crossroads' situation to the redevelopment of the Cinderella City Mall in Englewood. The mall couldn't compete with the newer malls that were opening in the area and was turned into City Center, a development that includes a mixture of housing, government offices, restaurants and retail stores. Crossroads may have to "find something else to be" like the Cinderella City mall did, Adams said.
Only 5.3 percent of the city's sales tax come from Crossroads, Shull said. He said there are eight goals for the mall's redevelopment, including making sure there is a mixed-used component, increasing mobility and fostering partnership between property owners, the university and other agencies.
When Park Meadows Mall first opened, it took away business from the Cherry Creek mall, but now things have evened out again and Cherry Creek mall is regaining business, Adams said.
Asked about how essential malls are today given that people now have the convenience of shopping on the Internet, Adams said they are still important.
"We're a hunting and gathering society and the gathering part is going to the mall," she said. "E-commerce is certainly growing and will be a larger and larger piece, but it's still probably less than one percent on the consumer side. It's much bigger on the business to business side, but that's not really where mall and sales receipts come in."
Hoyt discussed the future of residential growth and ways to achieve affordable housing in Boulder County.
"Employment drives housing growth," Hoyt said. "I am constantly amazed by how many people believe that, if you build it, they will come," she said. "The truth is that when the economy is poor, then homes won't sell."
Hoyt said she predicts that, "As long as the job market stays strong, the demand for housing will continue. Restrictions to housing growth will continue to increase. Housing prices will continue to rise. New suburban housing growth will continue to move north and east from Boulder County to where land is less expensive and restrictions to development appear to be fewer."
Hoyt discussed people's general dissatisfaction with anti-growth measures. "No housing development built in Boulder County during the last 20 years happened without government approval and without a public hearing, but despite the scrutiny and the regulations, most people claim to be unhappy with the results," Hoyt said. "This tells me that our entitlement process is not working to people's satisfaction and they're dissatisfied. In a booming economy, which we have, and in a growth-restricted environment, which we also have, housing development will happen where entitlement can be obtained."
According to Hoyt, there are growth restrictions, permit limitations, and moratoria in Boulder, Boulder County, Lafayette, Louisville, Longmont, Broomfield, Erie, and Lyons. The only nearby communities that don't restrict growth in any significant way are in Weld County, Hoyt said. Superior doesn't limit residential growth, but its boundaries are limited by its neighbors and Boulder County Open Space, Hoyt said, so expansion beyond what has already been approved is limited.
If Initiative 256 is validated and passes, all new developments in Colorado will be affected by legal restrictions that will probably subject every single annexation to a public vote, Hoyt said.
"The future pipeline for new lots will probably dry up for a couple of years while builders scramble to find developable property," she said. "It won't have an immediate impact on growth, but it will affect the region's long-term ability to provide housing for workers who are coming here." A restricted housing market bodes poorly for affordable housing, Hoyt said.
"Personally, I think allowing homeowners to have a second dwelling unit within their own home, or on their own lot, is the best market-driven way to address affordable housing," Hoyt said. "I know of several cases where this is occurring surreptitiously without any negative impact on the surrounding property."
Anderson talked about how for the first time, the Boulder Area Realtor's Association is going to provide monthly aggregated housing and market statistics.
"Our decision and ability to do this recognizes the changing marketplace that is driven by communication and technological systems innovations," Anderson said. "We believe that our members and the consumer are best served by the our facilitating the flow of accurate and timely market information and statistics. Additionally, these statistics will give consumers clear, understandable insight into Boulder's real estate market conditions and trends. I'm sure you'll see by the information provided that we have a vibrant, fast-paced real estate market here in Boulder.
