Each week the Baltimore Business Journal asks experts to answer a hot-button question about their industry. This week’s focus is on real estate and development.
What will it take for the real estate development market to rebound?
I’m confident that the market is poised and ready for a recovery. The residential builders/developers have retooled their product to better meet the demands of today’s buyers with things such as smaller lots, houses with ‘segregated’ space, i.e. living area over the garage for adult child/in-law. The missing ingredients of consumer confidence in the economy and the federal government’s need to implement programs designed to stimulate home buyers are key to the market’s rebound. In short, the industry has worked hard to do its part with the rebound by retooling their product. Now the government needs to step to the plate with programs to stimulate home purchase as well as continue to address issues that are impeding the growth of the economy and its impact on consumer confidence.
In the last few years, as we entered into the economic downturn and the shine of the homeownership “apple” has dulled, there has been an increase in demand for rental housing. Occupancy in rental communities is high; rents have increased 10 percent since this time last year at most Class A communities. There is a clear demand for more rental housing. The staggering Baltimore City real estate taxes have not only pushed homeowners to the less-taxed suburbs, but they have inhibited the ability for developers to move forward with new projects. Baltimore City should follow the example of other major metropolitan areas around the country, cut its real property taxes in half, and open the flood gates of new projects and scores of new city dwellers.