The Washington state chapter of NAIOP held its annual South Sound Economic Forecast conference in Tacoma to discuss the future of the region and describe the ways in which it can continue to grow. Several prominent members in the industry and the region spoke to a packed crowd at the February 2nd conference including Tacoma Mayor Marilyn Strickland, Pierce County Executive Bruce Dammeier, Thurston County Economic Development Council Executive Director Michael Cade and keynote speaker Lynn Michaelis, senior economist and president of Strategic Economic Analysis.
To kick off the conference, Mayor Strickland offered an uplifting overview of Tacoma’s market including growth in many sectors including industrial, office and multifamily housing. Mayor Strickland focused her presentation around the exciting projects the city has underway including the convention center, dome stadium and the University of Washington Tacoma, describing them as highly valuable assets to attracting more families to the city. But with more development comes the need for more housing to accommodate for the influx of more residents. Mayor Strickland said the need for more housing in the city is high due to the more expensive prices for homes and apartments in market’s like Seattle. “You’re seeing a trend where people are starting to migrate south because of the housing prices and affordability, and we need to think about how we capitalize on that,” she said. “Adding more multifamily housing to our market is incredibly important,” she added saying developers in Tacoma plan to break ground on more than 1,600 units this year.
There’s no reason we’re likely to see a recession in the next year or two unless somebody makes some serious policy mistake
Another focal point of her presentation was geared towards the relationship between publicly and privately funded projects, a theme consistent throughout the entire conference with nearly every speaker highlighting the importance of collaboration between the two sectors. “We know that publicly funded projects and investing in infrastructure have really helped move this city forward,” she said. “We’re finally at the point now where investing in all that public funding is starting to draw private investment to our market.”
With new projects from both public and private investment, Mayor Strickland believes these types of developments will set the stage to attract more people and more investment into the city. “I really believe the next decade is going to be an enormous opportunity for the South Sound. And the question becomes are we going to be ready for it and prepared for it or are we going to let growth happen to us. I think we’re ready for it,” she said in closing.
Speakers Bruce Dammeier, Pierce County executive, and Michael Cade, Thurston County Economic Development Council executive director, echoed Mayor Strickland’s thoughts on public and private partnership, arguing its importance for a successful economy and thriving region.
Dammeier said there are a number of ways in which the market can work better and more efficiently for growth to continue. “Recognizing that there’s not as much government can do by itself anymore, if we’re going to achieve big things, it’s going be done in partnership with others,” he said, pointing to collaboration with other businesses, nonprofits and other community leaders.
Dammeier also touched on the idea of government by network becoming increasingly more important, meaning that there needs to be more collaboration with cities, school districts and communities. Dammeier said it’s with these types of partnerships that things will move forward. To that point, he also stressed the importance of streamlining government processes within Pierce County and subsequently making the government more responsive and more accountable.
Cade, like Mayor Strickland and Dammeier, stressed the importance of collaboration across sectors. Cade pointed to a number of instances in which the public sector trailed the private sector in terms of growth. When looking at statistics from previous years, Cade said from 2004 to the present, the spectrum has nearly flipped where in 2004, 65 percent of all wages earned that year were earned in the public sector. Now, however, Cade said growth is going to happen on the private sector side.
But Cade said that can’t happen alone, and that it’s through public and private partnership that the region can truly thrive. “Economic development is a partnership, and it’s the ability to work with each other to make a better community.”
To offer a more comprehensive outlook of the economy on a national level, keynote speaker Lynn Michaelis, the former Weyerhaeuser chief economist of 37 years presented his economic forecast at the conference and highlighted his views on the risks and rewards of the real estate industry and the ways in which the state of the economy on the larger scale, looking at how the United States’ economy is doing, which he described as strong. Even more, Michaelis said, “Our economy is doing the best in the world.”
“There’s no likelihood of a recession in the United States,” he said. “There’s no reason we’re likely to see a recession in the next year or two unless somebody makes some serious policy mistake,” he said, hinting at some uncertainty in the White House.
While he projects the region will remain strong, he said on the national level, there are some lingering questions that might threaten the positive economy such as political unknowns in foreign markets like Russia and China, whose repercussions stretch all the way to the United States. Mentioned in those uncertainties is who Michaelis referred to as Washington D.C.’s “new cowboy.” He said under this new Trump administration, unknowns over multiple national policies are concerning.
While the Sound South’s government is drastically different than what we’re seeing in D.C., Michaelis said our region’s local economy and marketplace is ‘hot,’ with employment expected to continue to grow and unemployment shrinking to around 3.7 percent. The region’s unemployment rate is lower than the national average of 4.7 percent. “We are now in about the sixth year of relatively stable employment growth,” he said. Along with lower unemployment rates, Michaelis pointed to higher hourly wages as another factor into our strong economy. And in terms of regional boom, Michaelis sees no slowing down anytime soon.