BOMA symposium addresses growing pains

Problems related to growth dominated the 23rd annual commercial real estate symposium held by the Building Owners and Managers Association on Feb. 11. Notable topics included lack of transit and infrastructure, a labor shortage in the trades and the lack of housing.

Growing pains

Participants at the symposium saw growth as an unmovable and inevitable force in Idaho’s current economy.

“Being opposed to growth is like being opposed to an economic recession: good luck with that,” remarked Clay Carley of Old Boise LLC, one of the panelists on the “Growth in Idaho” forum.

Fellow panelist Tommy Ahlquist of Ball Ventures Ahlquist commented: “We can’t stop the demand of the people moving here.”

“The newcomers are here to stay,” said Patrick Shalz of TOK Commercial, during the local market forecast forum. “What’s needed is more local community building.”

Shalz also addressed some of the factors that drive Idaho’s growth: “It’s easy to see why many are moving here. Commercial space is $75 a square foot in San Francisco or Seattle, whereas it’s $28 in Boise.”

The current market shows no signs of slowing down based on the comments during the market forecast forum.

“For every (business) closure, there are five openings,” said LeAnn Hume of Cushman & Wakefield Pacific. “When there are closures, it’s usually due to a lack of reinvestment in the business, bad actors, bad corporate decisions or unqualified (management running) franchises.”

“Are we overbuilt?” Shalz asked. “We are at all time lows (in office space inventory). We’re meeting the demand for now, and the market is still strong.”

Interest in Idaho is increasing, commented Clay Anderson from Colliers International, who noted that investors from around the country are now looking at Idaho.

Labor shortage

One issue repeated several times during the symposium was the lack of sufficient labor trained in the trades.

“Construction costs are rising, but labor is a bigger problem,” said Neil Nelson of ESI Construction. “We have a lot of the crafts leaving (for better-paying areas). I don’t see our labor situation getting any better.”

Training locals to fill these jobs is one piece of the puzzle.

“The situation with not enough people going into the trades is not getting corrected,” Nelson continued. “It will become critical two to four years from now.”

Ahlquist added: “We need a trade school desperately.”

Transit and Infrastructure

Newcomers to Idaho inevitably add to the traffic and put strain on the infrastructure.

“Communities which get the secret sauce recipe for infrastructure right will prosper,” commented Megan Ronk of Idaho Power.

Government-legislated barriers to building transit and infrastructure were part of the discussion.

“Fully-developed infrastructure should be the highest priority,” remarked Carley. “This includes public transit, but to get that, there needs to be pressure on the Legislature to allow local governments to build that transit. … Treasure Valley has a linear layout with rail running through the middle of it. We could have great transit (here) since we already have great bones and a great layout to build it.”

“Property taxes and the bonds are not the way to invest,” David Turnbull of Brighton Corporation commented.

“Part of the problem is the false conservatism which refuses to invest,” Carley added. “Municipalities are not being given the tools (by the Legislature) they need to invest (in infrastructure and transit).”

Housing

No discussion on Idaho’s economy and growth would be complete without touching on the issues of housing inventory and affordability. The forum on growth presented some forward-looking suggestions to address the problem.

“The key word is inventory,” Carley said. “The demand for single-family homes and rising costs usually leads to increased sprawl and homelessness … We need resources to build inventory and a development plan for housing that has incentives for developers to do the right thing. … We need a 501(c)3 to develop housing and local communities need to combat nimby-ism.”

Ahlquist called on businesses to address the needs of the ALICE (Asset Limited, Income Constrained, Employed) population so they can afford housing.

“And that means we need better (paying) jobs and education in Idaho,” Ahlquist remarked.