LAI KeyNotes: January 2008

Letter from the President

Les Pollock

I hope it’s a happy New Year for all, but the issues of the day just won’t let me think so! The lead headline in my hometown newspaper this morning trumpeted “Trapped in troubled real estate market”. It went on to describe the plight of homeowners who can’t find buyers in our market. The article doesn’t point out answers, just problems. And, as with the bursting of any financial bubble – stocks, tulips or real estate -- the related media herd that helped run up the bubble now reports upon the results of its bursting with breathless prose that, itself, grows louder and spreads with what seems to be increasing speed.

Indeed, it seems that our expanded information technology helps to amplify the noise surrounding the issues rather than provide greater insight. Bloggers rant with “I told you so” articles, information posts proliferate with further documentation of the residential foreclosure crisis and the slide in commercial market demand. The articles tend to end with warnings to stay tuned for more of the same.

When markets go into decline profits of doom always seem to take center stage. And, it’s hard to find clear information or insights as to how the future may evolve. Most likely this is because these insights can only result from the careful analysis and synthesis of multiple streams of information and thinking, and that is something hard to generalize about.

Here is where LAI comes in. It strikes me that, as a community of disciplines related to land economics, our meetings are, in many ways, forums for discussing how to approach the issues of the day. Whether it’s through speakers and discussion panels, or just ordinary networking conversations, we tend to use our meetings to discuss ideas and approaches to deal with current challenges within our discipline. This gives us the opportunity to separate “herd” based information into streams of intelligent approaches for addressing the problems we or our clients face.

KeyNotes can also become a forum for the presentation and discussion of insights that members develop to address the current market challenges. Helen Sause, our editor, welcomes articles by members that help to clarify the issues, suggest ideas, or present approaches that stimulate our thinking about these challenges. I think we can do better than one “end of the world” blogger who bleated that the current foreclosure situation is the “mother of all real estate meltdowns”, but provided no further insight. LAI members are not the “hand wringer” types. Rather we are insightful, “can do” leaders of our particular professions. So how about using KeyNotes to share and debate current issues and approaches to land economics?

Les Pollock
LAI President
lpollock@camiros.com

Editor’s Column

Helen Sause

LAI President, Les Pollack has challenged the KeyNotes staff (me and all of you!) to focus on what LAI does best – problem solving. His challenge urges LAI provide the counterpoint to the gloom and doom being ballyhooed by the media and some of the very people who created this real estate bubble. Downturns in the economy truly affect everyone from those selling nails, couches, property, etc. to the unfortunates snowed by tiny print that set them up to lose when market changes and unanticipated housing repairs inevitably affect their homeowner costs! Not to diminish the devastating effect of this but the constant trumpeting of “spiraling into recession...” seems to have the impact of being a self fulfilling prophesy. The media hasn’t had so much fun since the collapse of the dot.com “bubble”.

As you see from Les’s letter, our Society can help counter this hysteria and present rational solutions through LAI forums with strong publicity about these meetings. The articles in KeyNotes give us an international forum to send this positive message. The January chapter reports show that thoughtful discussions are already occurring and now we need to be more intentional and taking up the challenge of using LAI’s knowledge and professional standing to provide a counter to the doomsday scenario.

In the meantime the Wall Street Journal features a global view of economic health in its article “A World Full of Grand Plans: Despite the Credit Crunch, Large Cities Across the Globe Have Huge Projects on Tap”. The article summarizes plans for Grand Avenue,Los Angeles (cost $3 billion); Hudson Yards, New York City ($20 billion); Stratford City, London ($7.9 billion); Porta Nuova, Milan ($3.6 billion); and Songdo City, South Korea ($30 billion) and mentions that more than eleven other ventures are on the books. The WSJ believes that “is a sign of growing confidence in urban living even as the current financial landscape grows bleaker.” It points out that “Of course, real estate is a local business that relies on the health of regional economies, not national or international ones. But real-estate finance is not local.” The article does not try to diminish the diverse challenges of building such huge projects.

For us the point is that such long range plans exist, this is not the end of the world and LAI members everywhere can exercise their considerable influence by giving context to the current economy, by problem solving, by looking forward to opportunities and above all publicizing the positive. Let’s get on it for the February forums and reports!

Till next time!

Helen Sause
International LAI Editor
helensause@alamedanet.net