Housing prices, relationship with D.C. lead chamber’s ‘State of the Economy’ discussion
Growth is steady, but not robust, said Dr. Terry Clower, director of George Mason University’s Center for Regional Analysis. The region's cozy business relationship with the federal government is at once a benefit and a vulnerability, he added, and housing costs continue to be a challenge.
“We certainly have seen growth in the past year. Actually, very strong growth by historic standards in terms of the number of jobs created,” Clower told the Times-Mirror. “We're talking on pace of creating 65,000 to 70,000 jobs a year, which is among the best performances this region has ever seen. But that does not mean we don't continue to have challenges.”
Clower said the persistent threats of federal budget cuts and sequestration, along with the possibility of new military base realignments, are major factors that threaten the region's growth.
“The overall context of the U.S. is, yes, we are growing, but nobody should have their party hats on,” Clower said. “This is a bit of a slog. Yes, it's positive. We're starting to see a little bit of wage growth, but not much, and we're probably about that time in the cycle when you would expect a slow down.”
Without sounding too dire, Clower said, “I will tell you with absolute certainty there's another recession coming.”
“Now, if I was good enough to tell you exactly when it was, I'd be charging a hell of a lot more for my time to tell you about it,” he joked.
The GMU economist made note of the region's impressive 3.4 percent unemployment rate.
“I can remember a time in my career when that would've been considered not possible for a region as big as Northern Virginia,” he said.
But when it came to the topic of housing, Clower was emphatic.
“Here's the issue, guys … your housing prices, let me give you a little secret – they're too high,” he said. “I'm told that in another three or four years I'll get over the rage at how much I pay for housing.”
Clower continued, “The problem is, we're not creating enough housing units. End of story.”
The housing comments stand in contrast to the views of many Loudoun County elected officials, who believe additional housing, people and students will put too great a burden on the county's finances.
Clower warned the region is going to lose out on new companies expanding or relocating due to the high cost of pricing.
“We have got to figure out a better way to do our housing planning, so that we can tie that into having the kind of housing that's needed for a wider range of workers,” he said. “You have to have housing for people across the spectrum.”
Roughly 100 business leaders and elected officials were on hand for the chamber's “State of the Economy” event at Belmont Chase Country Club.
Clower's address was followed up by Loudoun County Department of Economic Development Executive Director Buddy Rizer, who aimed to distinguish Loudoun from the rest of the region.
“We are very encouraged,” Rizer said. “Our pipeline has been very strong, very diverse.”
Loudoun's chief economic development officer said his office recorded 69 “wins” in fiscal 2016, a new record. The wins resulted in 1,500 new jobs and more than $2.2 billion in commercial investment, according to Rizer.
“Dr. Clower talked about how Northern Virginia is really driving Virginia and, to a large extent, Loudoun County is really driving Northern Virginia at this point,” Rizer said.
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